Employment grows but job market remains slack

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Although employment remains below pre-recession highs, the latest data has revealed that full-time employment is moving towards the highest levels seen since late 2008.

Canada-wide employment grew by 0.1% in December, held back by a decline in Quebec and bolstered by a gain of 0.5% in British Columbia. Despite the modest overall figure, it was a marked improvement on the lacklustre first three quarters of 2011.

While employment growth has been geographically patchy, and part-time employment in particular has increased (+1.6%), the growth that started in September was largely maintained through the final reporting quarter.

December’s employment growth was met by a rise in the size of the overall labour force, thus the official unemployment rate remained at 7.5% (See above graph).

The labour force gains are largely due to the rebounding participation rate, something  market commentators have attributed to the flow back into the labour market of people who returned to education during the height of the economic downturn.

B.C. is the notable exception: it has seen a falling participation rate, suggesting the overall unemployment rate will shrink in 2012.

Central 1 has forecasted employment to rise by about 1.5% in 2012 and the labour force to continue to grow both through both general population gain and higher participation. Employers are, therefore, unlikely to face a significantly tightened job market.

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