Workforce shrinking yet jobless rate lowest yet
The London area’s jobless rate last month matched an all-time low, but the local labour pool shrank for the second straight month in November, putting a cloud over what otherwise would be a positive job market report.
Statistics Canada figures show the jobless rate in the London census metropolitan area, which includes St. Thomas, Strathroy and parts of Elgin and Middlesex counties, dropped in November to 4.8 per cent — matching a record low for the region set in 2004 — from 4.9 per cent in October.
But after months of steady gains, it was also the second month in a row the region didn’t see gains in total employment, with the number of people employed dropping by about 2,900 to 253,400.
The labour force, which includes those working and looking for work, went down in November to 266,200 from 269,500 in October. October’s number itself reflected a loss of 1,100 people.
While calling some of these figures “discouraging,” Don Kerr, a King’s University College professor, said there’s no reason to press the panic button and believe things are slowing down.
“I wouldn’t say we’ve captured a trend quite yet. Yes, it is evidence that the demand for labour is stagnating somewhat, but we can’t say the labour force survey is decisive on this as of yet. I would wait for another couple of months before drawing that conclusion.”
More discouraging is the participation rate — the percentage of adults in the London area either working or seeking work — which edged down to 60.3 per cent in November from 61.1 per cent in October and remains below the Ontario average of 64.4 per cent.
“Our population growth has been solid over the last year, but employment growth has not kept up with this,” Kerr said. “I am certain there are many Londoners who want to work, but are not working.”
In Ontario, employment rose by 20,000 in November over October, bringing year-over-year gains to 66,000, most of them in full-time work. The unemployment rate, however, remained unchanged at 5.6 per cent, thanks in part to an increase of 19,600 in the number of people looking for work.
Nationally, the picture looked better. A blast of 94,100 new jobs knocked the country’s unemployment rate down to 5.6 per cent — its lowest since Statistics Canada started measuring comparable data more than 40 years ago.
The number marked the largest monthly increase since March 2012, when there was a gain of 94,000 jobs, Statscan said.
The November employment surge was fuelled by the addition of 89,900 full-time positions. The private sector added 78,600 positions in November, while the public sector gained 8,300 jobs.
Last month’s increase pushed the jobless rate down from October’s 5.8 per cent, which had been the previous low mark since comparable data became available in 1976.
“Broadly speaking, it is a pretty positive report and there’s a lot to like,” said Brian DePratto, a senior economist at TD Bank Group.
“You are seeing, by and large, full-time, private-sector employment,” he said. “And even with the labour force increase, you are seeing the unemployment rate going down, and that is a very encouraging sign.”
Wage growth, however, remains among the few negative details in the Statistics Canada report.
Year-over-year average hourly wage growth for permanent employees continued its decline in November, off 1.46 per cent to its weakest reading since July 2017.
Experts expected wage growth to rise thanks to the tighter labour market, but it has dropped monthly since its May peak of 3.9 per cent. It now sits well below inflation.
“I think it is very surprising, more than anything else, because when you think of an economy that is adding as many jobs and an unemployment rate that is at an all-time low, this is not the kind of situations you associate with an economy performing at this level,” DePratto said. “So it is still a bit of mystery.”