After two months of moderate growth, employment across the country dropped by 43,200 jobs, all of them part time, Statistics Canada said on Friday.The drop-off pushes Canada's unemployment rate up 0.2 per cent to 8.6 per cent, a number that many predict will continue to climb until it hits almost 10 per cent in 2010. This erases the positive growth in September of around 30,000 jobs and demonstrates that employers are still hesitant to take on new hires in this dismal economic environment.
Down south, the news was even more grim, with the United States' unemployment rate already reaching into the double digits at 10.2 per cent, the highest since April 1983.
In Canada, most of the month's disappointing decline came from retail, wholesale, natural resources, and "other services," and the data, contained in Statistics Canada's Labour Force Survey, showed that women aged 25 and older and youths between 15 and 24 accounted for all of the job losses.
"October was a reality check for a Canadian labour market that had been seeing a lot of hiring without much to show for it in terms of production," wrote Avery Shenfeld, CIBC World Markets' chief economist. "October's report hinted that the earlier run-up may have, in part, been statistical noise... Put the last three months together, and the trend shows very small net hiring on average, a result that is much more consistent with the limited growth we've thus far seen in economic output."
"Today's release of negative job numbers for October undoes much of the surprisingly strong reported improvement in September," said Erin Weir, an economist with the United Steelworkers, in a morning note.
On the thin plus side, construction jobs were up, as were transportation and warehousing, while the manufacturing sector continued to fare poorly. "The ongoing pressures to Canadian manufacturing remain evident as inventories continue to be drawn down and firms remain hesitant about boosting production," TD Bank economist Grant Bishop wrote in a note.
The damage was also worse out west, with 15,000 jobs lost in Alberta, which has suffered the steepest rate of decline of all the provinces since the economic crash, and a decline of 13,000 in British Columbia.
"Other pockets of employment growth were construction, education and health care, which supports the notion that government stimulus is currently the only job creator," Weir wrote. "However, a declining number of public-sector employees contradicts this hypothesis."
Rising unemployment in the early stages of a timid recovery from recession is not considered unusual, but the October data revealed unusual weakness given the hopeful signals of the previous two months.
Not only did 43,200 jobs vanish into thin air in October – the result would have been worse without the pickup of 27,500 in self-employment during the month.
That meant there were 70,700 fewer actual employees in October – 45,200 fewer in the private sector, and 25,600 less in the public sector.
In a weak economy, economists discount self-employment gains as mostly involuntary, the result of enterprising Canadians who have tried but cannot find regular employment.
Since employment in Canada peaked in October 2008, the economy has shed around 400,000 jobs. But the latest numbers, Weir writes, show the first full year of employment data since the economic crash took hold. And the conclusions are not positive.
"A sectoral breakdown implies a disproportionately large loss of relatively good jobs," Weir writes. "More than half of the employment decline, 218,000, was in manufacturing. Construction and other goods-producing industries eliminated a further 112,000 jobs. The entire service sector shrank by 70,000."
Not all the details in the October data were gloomy, however.
Statistics Canada noted that all of the job losses were part-time, and that, including self-employment, there was a net increase of 16,500 full-time jobs.
As well, hourly wages were 3.3 per cent higher than a year ago, well above Canada's official inflation rate.
But that's where the good news ended. The agency said the October data pushes the job loss total since October 2008, when the global recession began in Canada, to 400,000, or 2.3 per cent of the labour force.
The employment decline in the private sector has been more precipitous, a 4.1 per cent fall.
"Since October 2008, employment has fallen in most industries, with the steepest declines in manufacturing (-11 per cent), natural resources (-11 per cent), construction (-5.8 per cent), and transportation and warehousing (-5.8 per cent),`` the agency said in a note.
On the plus side, construction jobs edged up, as did transportation and warehousing, while the weak manufacturing sector was mostly unchanged.
Regionally, Alberta, British Columbia and Newfoundland suffered the greatest number of job losses proportionally.
With files from The Canadian Press
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