Canadian employment fell by 18,600 in December, the first drop since April 2007. Full and part time jobs were reduced by 9,300 and 9,400, accordingly.
Most working places were shaded in manufacturing. Since the beginning of this year 131,600 people have lost their jobs in manufacturing sector, which ensured 6.2% slippage in employment over year. This slippage is the highest level among the components of “service industry”. Wood, furniture, fabricated metal products, motor vehicles and parts producers suffered mostly. It is important to note that nearly 14% of Canadian workforce is engaged in this sector.
In the height of Christmas and New Year holidays 21,900 people lost their jobs in accommodation and food services industry. There was also stated a significant employment decrease in agriculture and education sectors.
These increases were partially offset by increases in transportation, warehousing, trade, construction and mining spheres. Retail trade hired 18,600 people. As a result, the growth in the trade industry was 2.4% over year. In December employment in transportation and warehousing edged up by 20,700 or 2.5%.
In spite of the crisis in the US real estate market Canadian construction firms hired 12,900 employees. Nevertheless, employment in this sphere was soared by 74,000 during the last twelve months.
Even so, unemployment rate remained at 5.9% (chart 1). However, average hourly wages climbed to 4.9% over year, which has been the highest rate during the last ten years.
Negative impact of manufacturing employment reduction, due to the strength of the Canadian dollar and higher competition on part of the emerging countries, was fully offset by job growth in the whole economy, thanks to record high commodity prices and relatively low interest rates.
However, further slippage of unemployment rate will be limited in medium term, as higher prices of oil have a political nature and growth rate of immigration is increasing. The US economic growth deceleration will have additional negative impact on labor market and will cause unemployment increase mainly in manufacturing.
CANADA ECONOMIC INDICATORS
Chart 1
Source: Bank of Canada, Bloomberg
