Canada’s unemployment rate has fallen to 7.1 per cent. The latest labour survey shows there were 61,000 jobs added to the economy in September.
Many jobs were created in the education sector as classes open up for a new school year. There were gains in the professional, scientific and technical services as well. More people are working in the accommodation and food services, natural resources and public administration sectors.
This all sounds great, but why does the outlook for job growth still feel sluggish and gloomy?
If you look deeper into the numbers, the job creation comes after two months of basically no growth in the labour market. In fact the unemployment rate rose in August. So don’t believe the newspaper headlines that say “Employment surges in September.” They should be adjusted to read, “Employment plays catch up in September.”
Unemployment is still higher than what’s considered the natural rate, around 5-6 per cent. In this range experts say the economy is functioning at its full capacity.
Canada is also losing jobs in some key industries including finance, insurance, real estate and leasing. Jobs have been cut further in the manufacturing, information, culture and recreation sectors.
So, the numbers may be better than what we had been expecting. But its no indication that Canada’s economy is in a better position then previously thought.
The best leading indicator is the stock market and right now the TSX is trading in bear market territory. That means the index is 20 per cent lower than its year highs. In fact it has fallen that much since January 2011.
Market volatility continues to be fueled by worries that Greece is facing default and that means the European Union’s future remains in flux.
In Canada the slowdown is further affected by a fall in commodity prices. Across the board, oil, silver, gold and natural gas have seen steep declines in the last few weeks. The commodity and resource sectors are the lifeblood of Canada’s economy. If the world is not buying, Canada is suffering.
When we compare our situation to the U.S. things do look better. That economic giant is still anguishing with record high unemployment at 9.1 per cent, with no reprieve in sight. Unfortunately, Canada continues to suffer from the mistakes of other countries. Debt problems, over spending governments, fiscally irresponsible lawmakers, unnecessary wars and a lack of control on tax payers. All happening in countries around the world.
Jobs are being created in Canada, but the continued creation relies heavily on the actions of the rest of the world. That is a scary position for Canadians to be in. Its like we are crossing our fingers that we can hang on to whatever jobs we can get.
Finally, if you have a job, keep it. If you’re frustrated in your job search, start being more creative. If you’re worried about being laid off, create an alternate source of income to fall back on. Learn a new skill or trade. I would recommend focusing on sectors that are creating jobs. Don’t believe the headlines about job growth, Canada is only one negative quarter away from a recession and that means this one-month could be an anomaly. Always remember unemployment is not just numbers, it’s real people out of work and it could easily affect you.