Survival, but not careers
A group of recent university graduates at a round table discussion at the Vancouver Observer said they were able to find survival jobs but not opportunities in the careers they'd trained for. SOURCE: Vancouver Observer
Canada's jobless rate falls to lowest level in two years, but gains modest
Source: Canadian Press
OTTAWA -- Canada's unemployment rate has fallen to its lowest level in more than two years as a combination of more self-employed workers and fewer job seekers in May pushed the key economic marker down to 7.4 per cent.
Statistics Canada said 22,300 new jobs were created last month, slightly above consensus estimates following April's strong 58,000 jobs gain.
The last time Canada's unemployment rate was as low as 7.4 per cent was January 2009, a few months after the economy had plunged into recession.
The details of the May report were less impressive, however.
The jobless rate dropped two-tenths of a point due as much to the fact that 27,500 fewer Canadians were actively looking for work as to the new jobs created.
While all the jobs were full time, they came in the less desirable self-employment category, which could indicate that many Canadians turned to creating their own employment because they were unable to find more traditional work.
"Small business is of vital importance to the Canadian economy, but job creation within this category in a soft spot for the economy (and) is always a knock against the quality of the headline gain,'' Derek Holt, vice-president of economics for Scotiabank, said in a note to clients.
The number of employees in Canada actually dropped by 7,500 in May and the goods producing sector of the economy saw a pullback in employment, with manufacturing taking the biggest hit with 22,500 fewer jobs. The month also showed the public sector is starting to tighten, shedding 44,300 jobs as governments begin dealing with large deficits.
The markets treated the report as a status quo finding. The loonie barely budged after the data was released early Friday, although the currency swooned in later trading on dipping oil prices.
Holt noted that hours worked rose just 0.3 per cent and wages were only 2.2 per cent higher than last year, down from 2.6 per cent in March.
"After stripping out inflation, real wages are going nowhere and that remains bearish for consumer spending as households are simply unable to post income growth beyond covering higher fuel and grocery costs in a generalized commodity shock,'' he said.
Still, analysts said any job gain following April's strong advance is good news. It showed April was not a mirage.
"The details in this month's job growth were not all rosy, but any gains at all were impressive given that they came on the heels of an outsized 58,000 prior-month tally and amidst signs that the economy is decelerating sharply in the second quarter,'' said CIBC chief economist Avery Shenfeld .
Not to be overlooked, he added, is that private sector employers added workers, although a small number.
Another positive for the future, said Jimmy Jean of Desjardins Capital Markets, is that the factory sector is likely to recover once supply chain disruptions from the Japanese natural disaster are resolved.
Most economists had predicted a slowdown in job creation not only because they viewed April's increase as an above-trend anomaly but also because other economic indicators pointed to slowing activity.
Meanwhile, consumer spending and housing have fallen off of late and, earlier in the week, the government reported that the important export sector shrank by 1.1 per cent in volume terms in April.
Despite the softness, Canada's economy is doing far better than its southern neighbour, which in the same month created only 54,000 jobs, a tiny amount given the size of the U.S. labour force.
In the past year, Canada has more than recouped all the jobs lost during the 2008-2009 recession, creating 273,000 in the last 12 months alone, most full time and in the private sector. Meanwhile, the U.S. remains several million shy of its pre-crisis level and the jobless rate is above nine per cent.
In May, most of Canada's employment gains came in the retail and wholesale trade industries, and in information, culture and recreation. There were losses in manufacturing and educational services, mostly of those in post-secondary institutions.
Regionally, the lion's share of job creation came in Quebec, which saw its employment rise by 24,800, while Ontario saw a drop-off of 16,100.
More from the Vancouver Observer:
Job opportunities are still scarce for new university graduates seeking to start careers in Vancouver. "My friend can't even get a volunteer job," said a young woman in the marketing industry. At the round table, another female stated: “People I know are under-employed. They have a job but it’s a survival job. It’s not what they’re really qualified to be doing.” New graduates are entering a tough market. "Entry-level jobs don't seem to exist anymore. Without industry experience, the only option for recent graduates seems to be retail and the food and beverage industry," explained an unemployed female in her mid-twenties.