24,000 Ontario jobs lost in June
Firms facing slowdown in sales take cautious approach to new hiring
Jul 12, 2008 04:30 AM
Comments on this story (6) Rita Trichur Business Reporter
Prospects for Canada's once-mighty labour market are looking increasingly dim after it lost 5,000 net jobs in June as full-time positions vanished and the unemployment rate rose to 6.2 per cent, economists said yesterday.
Ontario has the dubious distinction of being the month's "big loser" after shedding 24,000 jobs. That stood in contrast to May, when it led the country in job creation.
With the national labour market now in negative territory, analysts predict the Bank of Canada will leave its key interest rate unchanged at 3 per cent next week.
Economists had forecast the creation of 10,000 positions, leaving the jobless rate at 6.1 per cent. Statistics Canada instead reported a sharp drop in full-time positions as some 39,200 jobs were slashed from payrolls. The creation of 34,200 part-time jobs helped offset those losses.
Full-time job losses have occurred in three of the last four months. In June, employers were increasingly skittish about offering those coveted positions in both the private and public sectors.
"The move away from full-time work in favour of part-time is consistent with a slowing labour market and signals more labour market weakness is likely still ahead of us," said James Marple, an economist with Toronto Dominion Bank.
As well, those jobs being created are "lower quality," said Adrienne Warren, senior economist with the Bank of Nova Scotia. That is because part-time jobs typically have lower wages and fewer benefits.
"Businesses are taking a much more cautious approach to new hiring right now, given they are facing the prospect of slowing sales growth," Warren said.
That trend is expected to continue, particularly in Central Canada.
The net loss of 24,000 jobs raised Ontario's unemployment rate by 0.3 percentage points to 6.7 per cent in June.
In a rare showing, manufacturing gains counterbalanced losses in construction, said Marple. "The services sector in Ontario on the other hand saw significant losses, shedding 31,800 jobs."
Still, employment in the province has grown 1.7 per cent during the past 12 months because of gains in construction and the service sector, Statistics Canada said.
Ontario Progressive Conservative John Tory seized on June's net decline, saying it proves the Liberal government's economic plan is failing the province.
"Statistics Canada says Ontario lost another 45,000 full-time jobs last month – the worst results in the country and Ontario's biggest monthly loss since 1990. That's like the entire city of Cornwall or Timmins disappearing," stated Tory.
Employment is considered a "lagging indicator," meaning earlier economic declines are only now materializing in the data, economists said.
Ontario's gross domestic product declined 0.3 per cent in the first quarter, leaving it teetering on the brink of a recession.
The Bank of Canada, however, must consider the big picture when deciding on interest rates. Soaring commodity and food prices are fuelling inflation, while the U.S. recession is hindering economic growth.
The central bank stunned the market last month when it kept the overnight rate at 3 per cent. Economists had expected a cut.
This time around, however, weak employment data will make it easier for the bank to hold rates steady, economists said.
Jul 12, 2008 04:30 AM
Comments on this story (6) Rita Trichur Business Reporter
Prospects for Canada's once-mighty labour market are looking increasingly dim after it lost 5,000 net jobs in June as full-time positions vanished and the unemployment rate rose to 6.2 per cent, economists said yesterday.
Ontario has the dubious distinction of being the month's "big loser" after shedding 24,000 jobs. That stood in contrast to May, when it led the country in job creation.
With the national labour market now in negative territory, analysts predict the Bank of Canada will leave its key interest rate unchanged at 3 per cent next week.
Economists had forecast the creation of 10,000 positions, leaving the jobless rate at 6.1 per cent. Statistics Canada instead reported a sharp drop in full-time positions as some 39,200 jobs were slashed from payrolls. The creation of 34,200 part-time jobs helped offset those losses.
Full-time job losses have occurred in three of the last four months. In June, employers were increasingly skittish about offering those coveted positions in both the private and public sectors.
"The move away from full-time work in favour of part-time is consistent with a slowing labour market and signals more labour market weakness is likely still ahead of us," said James Marple, an economist with Toronto Dominion Bank.
As well, those jobs being created are "lower quality," said Adrienne Warren, senior economist with the Bank of Nova Scotia. That is because part-time jobs typically have lower wages and fewer benefits.
"Businesses are taking a much more cautious approach to new hiring right now, given they are facing the prospect of slowing sales growth," Warren said.
That trend is expected to continue, particularly in Central Canada.
The net loss of 24,000 jobs raised Ontario's unemployment rate by 0.3 percentage points to 6.7 per cent in June.
In a rare showing, manufacturing gains counterbalanced losses in construction, said Marple. "The services sector in Ontario on the other hand saw significant losses, shedding 31,800 jobs."
Still, employment in the province has grown 1.7 per cent during the past 12 months because of gains in construction and the service sector, Statistics Canada said.
Ontario Progressive Conservative John Tory seized on June's net decline, saying it proves the Liberal government's economic plan is failing the province.
"Statistics Canada says Ontario lost another 45,000 full-time jobs last month – the worst results in the country and Ontario's biggest monthly loss since 1990. That's like the entire city of Cornwall or Timmins disappearing," stated Tory.
Employment is considered a "lagging indicator," meaning earlier economic declines are only now materializing in the data, economists said.
Ontario's gross domestic product declined 0.3 per cent in the first quarter, leaving it teetering on the brink of a recession.
The Bank of Canada, however, must consider the big picture when deciding on interest rates. Soaring commodity and food prices are fuelling inflation, while the U.S. recession is hindering economic growth.
The central bank stunned the market last month when it kept the overnight rate at 3 per cent. Economists had expected a cut.
This time around, however, weak employment data will make it easier for the bank to hold rates steady, economists said.
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