All good times must come to an end, it’s just tricky to figure out when the end is near. Statistics Canada (StatCan) unemployment numbers show Canada made a big improvement in April. The national level of unemployment continues to fall. Unfortunately, the trend skipped the most expensive real estate markets – Toronto and Vancouver. On the upside, if you’re in Calgary or Montreal – things are starting to improve.
Unadjusted Vs Seasonal Adjustment
Today we’re looking at both the unadjusted and adjusted rates of unemployment. The unadjusted rate, like you would guess, does not account for seasonality in its numbers. These are the numbers before statisticians guesstimate the impact of weather on employment. These numbers are most useful when doing a year-over-year comparison. Monthly changes are way too volatile to yield any real insights.
Seasonally adjusted data minimizes the impact of seasonality on employment. Generally, it lowers summer numbers and increases winter ones. This helps to give a smoother trend-line, and allows a month-over-month comparison. Exercise some caution when using these numbers, since it includes an extra layer of abstraction. These numbers are only as accurate as the anticipated influence of seasonality.
Since both numbers are from samples and not every single person – neither are 100% accurate. That’s why it’s important to not look at the actual numbers of jobs created or lost. Instead, you should be looking for the relative direction of the trend. New employment leads to more spending, which can lead to more jobs. This means an improvement to the economy may be coming. A rise in unemployment leads to less spending, which leads to fewer jobs. Got it? Let’s take a peak at these numbers.
Unemployment Is Falling Across Canada
When taking a macro view, Canada’s employment numbers look much better today than they did a year ago. The unadjusted rate of unemployment fell to 6.1% in April, down 1.61% compared to the year before. The seasonally adjusted rate of unemployment fell to 5.8% in April, flat from the month before and last year. Generally speaking, things are looking pretty good across the country. Except when you dive into numbers for Canada’s largest real estate markets.
Canadian Unemployment Annual Change
The annual percent change of unemployment across Canada.
Source: Statistics Canada, Better Dwelling.
Ontario Is Seeing Unemployment Rise, Especially In Toronto
The rate of unemployment in Ontario is climbing, especially in Toronto. The unadjusted rate of unemployment reached 6% in April, up 5.26% from last year. On a seasonally adjusted basis unemployment hit 5.8%, unchanged from the month before. Compared to last year, seasonally adjusted unemployment has increased 3.57%. Overall, the rate of unemployment is low compared to other provinces, but is climbing.
Toronto Unemployment Annual Change
The annual percent change of unemployment across Toronto.
Source: Statistics Canada, Better Dwelling.
Toronto, the province’s largest city, may be responsible for the bulk of that climb. The unadjusted rate of unemployment hit 6.6% in April, up 11.29% from last year. Seasonally adjusted the rate was still 6.6% in April, unchanged from a month before. Noteworthy is the month before is also the highest seasonally adjusted unemployment number since July 2017. Seasonally adjusted unemployment in Toronto has increased 10% from last year.
British Columbia Unemployment Drops, While Vancouver Picks Up
Unemployment in British Columbia in on the decline across the province. The unadjusted rate of unemployment reached 4.6% in April, down 6.12% from last year. Seasonally unadjusted unemployment was also 4.6%, unchanged from the month before. When compared to last year, adjusted unemployment is down 4.16%. Yay, unemployment is falling – just not in Vancouver.
Vancouver Unemployment Annual Change
The annual percent change of unemployment across Vancouver.
Source: Statistics Canada, Better Dwelling.
Vancouver’s rate of unemployment is climbing by all measures. The unadjusted rate of unemployment reached 4.5% in April, up 4.65% from last year. The seasonally adjusted rate of unemployment reached 4.4%, down 8.33% from the month before. Compared to last year, seasonally adjusted unemployment is up 4.76%. This is a low rate compared to other cities, but starting a trend that city politicians should be breaking a sweat over.
Quebec Unemployment Is Dropping, Especially In Montreal
On the other end of the spectrum, Quebec is seeing unemployment drop as the economy warms up. The unadjusted rate of unemployment fell to 5.8% in April, down 4.91% from last year. The seasonally adjusted rate fell to 5.1%, down 3.77% from the month before. That represents a 7.27% decline compared to last year.
Montreal Unemployment Annual Change
The annual percent change of unemployment across Montreal.
Source: Statistics Canada, Better Dwelling.
Montreal’s unemployment numbers are higher, but seeing even larger improvements. The unadjusted rate of unemployment reached 5.8% in April, down 9.37% from the year before. Seasonally adjusted unemployment fell to 5.4%, down 5.26% from the month before. This represents an 11.47% decline compared to last year. These are huge improvements, that could help explain the rise in home prices.
Alberta Unemployment Is Rising Again, But Calgary Declines
Alberta is seeing unemployment rise, after years of improvements. The unadjusted rate of unemployment reached 7.1% in April, up 5.97% from last year. The seasonally adjusted rate reached 6.9%, down 1.42% from the month before. This represents an increase of 4.54% from last year. Calgary was one place that bucked this trend.
Calgary Unemployment Annual Change
The annual percent change of unemployment across Calgary.
Source: Statistics Canada, Better Dwelling.
Calgary’s rate of unemployment continues to decline by all measures. The unadjusted rate of unemployment fell to 7.2% in April, down 7.18% from last year. The seasonally adjusted rate of unemployment reached 7.6%, down 1.29% from the month before. This represents a decline of 3.79% compared to last year. The overall rate is higher than other cities its size, but things are improving.
Remember, relative direction is more important than the actual numbers. Cities like Calgary have higher unemployment levels, but are seeing things improve. One major issue to note is provincial weakness looms, which could flip the trend. Montreal is also seeing big improvements, and the province is as well. This is a logical explanation for Montreal’s real estate boom. The boom being relative, because price growth in the city is still behind the national trend.
On the flip side of that stat, is Toronto and Vancouver with rising unemployment. After an extended economic boom, largely due to real estate, the decline makes sense. Both cities are still at relatively low rates compared to their peers. However, it’s the relative change that matters most. Neither city is taking note, or even mentioning it to the general public, which is going to make it hard to prevent the issue from snowballing.
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It’s fine. We’ll have corner store cannabis, which will generate so much money it’ll float the whole country. Or at least, they’ll be so high they won’t care.
Two myths about Toronto blown up – growing jobs and population. When people are buying on narratives instead of due to rising economic growth, the market is overextended.
Head of the CMHC using both the tulip and calling out people saying “this time is different.”
It’s a little rich coming from a major contributor to this asset bubble, but now that even they’re saying a bubble and warning of a crash, you’ve gotta ask yourself – who’s promoting the higher price narrative?
https://www.cmhc-schl.gc.ca/en/media-newsroom/cmhc-statement-letter-standing-committee-finance-fina
Thanks for the information and nice too.
Thank you, amazing article, it really puts things in perspective.
We need buck an hour wages, quick!
lol, now that’s funny!
Two days ago heard through a reliable source that young immigrants were returning to their original countries obviously they were struggling to find decent paying jobs. Lets wait and see for how long the RE industry could sell the immigrants and more housing story.
Young people from rural towns tend to move into big cities thinking that they could find jobs.
Another desperate report by BD. When whining about interest rate… baby boomers.. stress test…over supply…China money…Money laundering….so many reasons….what next? Raptors lost final so market should fall lmao.
Another great Mmr insight! I don’t even come on here before 1pm anymore because I know you will still be in bed.
How is the inheritance going for you pal?
He uses a two headed coin to make bets
Just stop reading BD already, its obvious there getting desperate. So is IMF, CHMC and Steven Poloz. Everyone knows housing can only go up and people have millions just waiting to buy everything in sight, but just in case here is another perspective not written by better dwelling.
https://www.cmhc-schl.gc.ca/en/media-newsroom/cmhc-statement-letter-standing-committee-finance-fina
Um, that article was already linked to above. And it doesn’t support what you’re saying. Not at all. There are no millions sitting on the sidelines waiting to scoop up Canadian housing. That’s your imagination.
Go look at the Twitter feed @VanREflipflops for some good clean fun.
Yup, good thing there are millions sitting on the sidelines waiting to prevent the market from falling. Otherwise the “investors” who thought they were ballin’ might be losing their shirts as the real estate Ponzi scheme finally has its Minskey moment.
All those millions can make an appearance any time now.
Yep. Any minute now.
Should be soon.
Um, I’m still waiting….
…Hello? Anyone there? You can start buying homes again.
Please?
WHERE IS EVERYONE??????!!!!!!
Really, you couldn’t sense sarcasm there? I could smell if from a hundred km’s away.
I had to read this twice before I figured out it was sarcasm. That’s embarrassing.
Mms
Thanks for that useful insite my friend.
DB sends charts stats news reports reports from cmhc Etc. Most commentaries use the same type of evidence comparing fundamentals.
But you ?….you just get mad!
Yeah …sounds like BD is pretty desperate!😊
Declining RE sales volume is gnawing away at related-industry employment in Toronto, while
the increased activity in Montreal is giving the local economy a boost.
And this with May condo new listings spiking up, and sales volume way down.
Ironically, the only thing standing between prices holding and a total market collapse is
greed-crazed “investors” … nothing will prevent them from jumping into the what has seemed like a bottomless snake pit …but eventually the pit will fill up.
Haha exactly what I wrote on a comment couple of months back about unemployment is a essential punchline that will bring the price down.
Good thing I have been saving cash. It’s time to pick those condos up lol oh btw condos in Toronto are getting ‘delisted’ cuz they for being listed for too long.
hmm interesting. will the unemployment rate eventually lower alberta real estate prices? probably a long shot since real estate is still very good, future-proof almost, investment. It’s a long shot, but we are going to have to see.
One of my friends graduated with a degree, and the campus only offered “jobs” and “internships” which were unpaid and work for free. This is in Toronto and the post-secondary institution is one of the Top 10.
You will be amazed at how many graduates are on a wait-list to work for free for that internship program.