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A new Labour Force Survey from Statistics Canada shows a major boom in employment led by the provinces of Ontario and Quebec between August 2018 and August 2019.
According to StatsCan¸ employment has increased by 471,000. Both full and part-time work has increased by 306,000 (2 per cent increase) and 165,000 (4.8 per cent increase) respectively.
In August 2019 alone, employment in Ontario increased by 58,000, all in part-time work. These gains were led by wholesale and retail trade, reports StatsCan. Over the year, employment in Ontario alone has grown by 250,000, a 3.5 per cent increase; however, this is believed to be so substantial because August 2018 was a low point in employment.
“Employment in Quebec rose for the second consecutive month, up 20,000 in August. There were gains in a number of industries, led by finance, insurance, real estate, rental and leasing,” reports StatsCan.
The unemployment rate was little changed at 4.7%, the lowest rate in the province since comparable data became available in 1976, and the lowest amongst all provinces in August. Compared with 12 months earlier, employment in Quebec increased by 112,000 (+2.6%).”
The other three provinces that saw a notable increase in employment are Manitoba, Saskatchewan, and New Brunswick. Employment in Manitoba is up 5,200, Saskatchewan’s workforce increased by 2,800 in August, and New Brunswick saw a 2,300 increase in employment.
Significant increases were seen in three major industries, these being finance, insurance, and real estate (rental and leasing). 22,000 new jobs were created in August, with year-over-year gains of 46,000. The increases in August were seen primarily in Ontario and Quebec.
Additionally, after two months of little change, Canada saw a growth of 17,000 in professional, scientific, and technical services in August, primarily in B.C. Year-over-year gains are 109,000 (7.4 per cent), making this the fastest growing sector in the country.
One industry that is down is business, building, and other support services, with 22,000 fewer workers in these industries, primarily due to declines seen in Ontario and B.C.
The number of private-sector employees has also increased substantially over the year, with an increase of 394,000 between August 2018 and August 2019.
“The economy added 81,100 jobs last month, Statistics Canada said Friday in Ottawa, versus expectations for a gain of about 20,000,” writes BNN Bloomberg. “It’s the seventh largest monthly gain in records going back to 1976. Canada has now added 471,300 jobs over the past 12 months, the most in a year since 2003.”
Overall, in August, Canada saw an 81,000 increase in employment.
All of this is good news. However, there is some disagreement regarding how long or sustainable this growth will be. As mentioned earlier, part of the reason this growth is so substantial compared to 2018 is because of prior stagnation in various industries.
According to BNN Bloomberg, the report reaffirms expectations of the Bank of Canada, who believe that the increase in employment indicates “a certain amount of resilience to global trade headwinds, giving the central bank ammunition to buck the global easing trend.”
Such resilience, if true, would be very desirable for the country, as some believe that we’re overdue for a major recession, which is expected to hit sometime in 2020.
“If the Bank of Canada was on the fence about cutting rates in October, today’s jobs numbers might be one further push towards standing pat,” Avery Shenfeld, chief economist at CIBC World Markets, said in a note to investors.
However, other experts are less optimistic, citing contradictory indicators such as the ongoing trade war and the slow recovery from the last recession.
“There’s just too much contradictory data floating around right now and I do think that rates are going to come down, but not this round,” said Ian Lee, faculty chair at Carleton’s Sprott School of Business, joining a number of experts who fear a coming recession.
“First of all there’s the Trade War with China, and we’re collateral damage in that and we’ve had the longest recovery in our history, and in American history. 10 years is the last recession and the average according to people who date the cycles is around five years, so this recovery is double the norm.”
A recent statement from BoC said that this recent growth “exceeded the Bank’s July expectation, although some of this strength is expected to be temporary.” From this and the above statements, it isn’t clear whether the BoC will be cutting rates to brace for a recession, but it is likely that the current rates of growth may decline.