March wasn’t a good month for anyone out of work and looking for a job. Canada lost more than 54,000 jobs, sending the national Canadian unemployment rate up to 7.2 per cent from 7.0 per cent the month before. The surprising numbers are the worst in four years and indicate that economic recovery is still very much a work in progress. What’s most concerning is the overwhelming majority of jobs lost, were full time.
It’s worrisome because it’s full time jobs that give people confidence to spend money and take out long-term loans, like mortgages. One of the areas always affected by unemployment is real estate. With this being the busiest time for housing sales the bad news about unemployment couldn’t have come at a worse time. Here’s how these numbers could play out during this busy season, even if you have a full time job.
Discouraging New Home Buyers
The lack of a stable, full-time job is a common barrier to entering the housing market. Even if you’re employed, if you’re relatively new to your job, the news of losses in every Canadian sector may convince you to take the wait and see approach. Current homeowners are also less confident and willing to buy a bigger or more expensive house. There can be many who are out of work or underemployed that might decide to keep renting or stay in the house that they own.
Selling At a Loss
For some Canadians, especially those who are out of work, it might prove too hard to pay the mortgage on their house and they may be forced to sell their property. If the market is softer than expected and there are fewer qualified buyers, homeowners may have to settle for a lower price. Selling homes under market value devalue similar properties in your area and make it harder for other homeowners to get fair value for their home.
The lack of confidence in home buying translates to lack of confidence in home renovations as well. When you’re out of work, a new deck, an upgraded kitchen or better landscaping is not a priority. Generally home renovations increase the value of a home and by extension the value of the neighborhood. By putting those renovations off a homeowner is delaying a possible rise in their property value as well.
Big Ticket Purchases Delayed
Higher unemployment also means a slowdown in big-ticket purchases like large appliances and furniture. If you aren’t buying a new house or renovating the one you’re in, your likely not spending extra money on new appliances or décor. By not purchasing these items inventories at stores rise which brings prices down and trickles down to the manufacturer who has to slow demand. That can mean the loss of jobs and definitely the loss of growth at a company.
An Increase In Entrepreneurs
This report shows job losses across each and every sector, but with modest gains in self employment. Since the nature of working for yourself is so unpredictable this can be an indication that many Canadians might put off spending large amount of money until their business takes off or they find themselves in full time work again. If you’re looking for work the best place to start is to see how you can improve your skills to become more employable. The Federal government recently announced there is a shortage for skilled labourers and has put in programs to support Canadians wanting to learn new trades and skills. By focusing on what the economy needs and where the greatest demand is Canadians can increase their chances of finding full time, permanent meaningful work.
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