THE LABOUR MARKET the rennie brief
WHAT YOU NEED TO KNOW: CANADIAN EMPLOYMENT BOOMS IN JUNE
• After achieving some gains in May, employment surged in June, with Canada adding almost 1 million jobs and BC adding 118,000 • While national and provincial unemployment rates fell, Metro Vancouver’s rose—despite the region adding almost 68,000 jobs—as more job seekers flooded into the market • More jobs and more job seekers are features of economic recovery, with the region’s employment rate rising from 52.3% to 55.1%
14 JULY 2020
Canada, BC, and Metro Vancouver all experienced a surge in jobs in June. It’s a good start, with the (re-)expansion expected to continue over the coming months, albeit at a more tempered pace.
Unlike the unemployment rate, which can paradoxically rise as employment grows (just as it did this past month as Metro Vancouver added almost 68,000 jobs), the employment rate (calculated as the number of jobs as a share of the adult population) is a more direct measure of the extent to which an economy’s potential labour pool is being utilized. The higher the employment rate, the more highly-functioning is the economy (generally-speaking), and vice versa. Notably, the employment rate here in Metro Vancouver rose from 52.3% in May to 55.1% in June—clearly a move in the right direction. That being said, we still have a ways to go, as the employment rate remains well below its 12-month average through February 2020 of 64.7%. So while it is easy to viewMetro Vancouver’s rising unemployment rate as a sign that the economic recovery has yet to take hold here, our market is currently characterized by rising employment and a growing number of people actively looking for work. In fact, June’s 81,000-person growth in the region’s labour force was also the highest on record. WHAT DOES THIS MEAN FOR OUR MARKET? The June jobs data were unequivocally positive for Canada, BC, and Metro Vancouver. Significant gaps remain, however, between current employment levels and those that prevailed before the Great Suppression, especially when we parse the data by sector, age, or gender. Should the pandemic remain contained in the coming months, we expect employment to continue to recover, albeit at a more tempered pace than in June. To the extent that it does, it will provide support for many dimensions of our economy, including the public sector, retail and travel, and our housing market.
CONDITIONS IMPROVE IN CANADA & BC The latest jobs data released by Statistics Canada are largely feel-good in nature, with all provinces registering employment growth (albeit it from historical lows) last month. Nationally, 953,000 jobs were added between May and June; British Columbia accounted for 12% of this total, with the province adding 118,000 positions. Each of these month-over-month job gains are the largest on record for their respective jurisdictions. After two consecutive months of rising employment, both Canada and BC have regained 41% of the job losses sustained in March and April (of 3 million jobs and almost 400,000 jobs, respectively). In BC, June’s job surge was driven by a recovery of lost part-time positions, with the 102,000 part-time jobs added between May and June accounting for 86% of BC’s month-over-month growth. The unemployment rate fell both nationally and provincially as a result of the job gains, to 12.3% and 13.0%, respectively METRO VANCOUVER: MORE THAN MEETS THE EYE While national and provincial unemployment rates fell, Metro Vancouver saw its unemployment rate move in the other direction, increasing from 14.1% to 14.2%. Under normal circumstances—that is, during times of stable economic activity and labour force participation— this would typically indicate a deterioration in labour market conditions. These are, however, anything but normal circumstances and, fortunately, there is a better measure of our short-term labour market performance: the employment rate .
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