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Canadian Employment Disappoints Again in February

ByThe National Bank of Canada
Published 03/12/2012, 02:05 AM
Updated 05/14/2017, 06:45 AM

FACTS: Canadian employment fell 2.8K in February according to the Labour Force Survey. That was well below consensus expectations for a 15K gain. However, given the drop in the youth participation rate, the unemployment rate dropped two ticks to 7.4%. For the fourth month running, goods-producing industries (+17.8K) did better on the employment front than the services sector (-20.7K). The goods sector was buoyed by the comeback in construction and further gains in manufacturing. Services employment got a lift from the FIRE category (which rebounded after steep declines in prior months), but that was more than offset by declines elsewhere. Full time employment rose 9.1K after a two month decline while part-time employment fell 12K. Private sector employment fell for the first time in four months (-1.7K). Employment creation was weak across much of the nation with Ontario seeing jobs losses and Quebec creating almost no new jobs. Even economic outperformers Alberta and Saskatchewan saw job losses in February.

OPINION: The LFS is clearly weak, and this time it's not just a Quebec story, with several provinces seeing job cuts. The decline in private sector employment is not good news. Wages, however, may have had some support nonetheless, given that most of the job losses came in the low-pay categories, e.g. youth and parttime
employment. The ramp up in manufacturing employment is encouraging and reflects the improved US demand, e.g. autos. The more reliable three-month average shows that Canada created 7,000 jobs/month all in the private sector, which suggests that we're far from recessionary conditions despite the generally soft headline jobs numbers.
Employment disappoints in February
Unemployment rate drops in February but only because of declining participation rate

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