Still wondering if Canadian real estate is running the economy? Just look at the latest job numbers. Statistics Canada (Stat Can) numbers show a small uptick in unemployment, with 24,000 jobs lost in July. However, the weakness didn’t impact the real estate and construction industries. Both sectors are now at an all-time high for jobs, and added over 30,000 jobs to the economy last month.
Canada Loses Over 24,000 Jobs In July
Canada lost a few thousand jobs last month, the second consecutive decline on a monthly basis. There were 19,030,000 employed across Canada in July, down 24,200 from the month before. This represents a 0.13% decline, but the number is still 1.89% higher than last year. Even though the country experienced job losses for the month, there’s still growth.
Canadian Unemployment Rate
The percent of people actively in the Canadian workforce, that aren’t currently employed.
Source: Statistics Canada, Better Dwelling.
The rate of unemployment made a small uptick, after hitting a record low. The rate of unemployment hit 5.7% in July, up from a multi-decade low of 5.4% in May. This is the third consecutive monthly increase for the rate. The rate remains very low, however it hasn’t historically been able to hold this level for long. The trough, sometimes known as “peak employment,” is often considered unsustainable.
Notable losses occurred in Alberta, Ontario, and B.C, while Quebec saw a big increase in employment. Last month, Alberta lost 14,300 jobs, Ontario dropped 10,700 jobs, and British Columbia shed another 4,800. Quebec bucked the trend and added a massive 16,600 jobs during the same period.
Real Estate Sector Employment Rises To A New All-Time High
Employment in the finance, insurance, and real estate (FIRE) sector moved to an all-time high. The FIRE sector employed 1,199,100 people in July, adding 5,400 people from the month before. The monthly increase is 0.45%, and the number of employees is up 1.58% from the same month last year. Even though the general economy shed jobs, this sector saw an increase. The year-over-year increase was still lighter than the general economy though.
Canadian FIRE Employment
The number of people estimated to work in Canada’s finance, insurance, and real estate (FIRE) industries.
Source: Statistics Canada, Better Dwelling.
Canada’s Construction Industry Reaches A New Employment High
Construction, another industry closely related to real estate, also reached a record high. The industry employed 1,474,100 people in July, up 25,000 from the month before. That’s a 1.73% increase for the month, with employment in the industry rising 2.67% from last year. Both the monthly and annual increase outperformed the general market.
Canadian Construction Employment
The number of people estimated to work in Canada’s construction industry.
Source: Statistics Canada, Better Dwelling.
Canadian real estate is still driving the economy, even with re-sales slowing. Construction and FIRE sectors combined now employ 14.04% of all Canadians, or more than 1 in 10. This number is up 54 bps from a decade ago, and a massive 228 bps from 20 years ago.
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How low is it possible for unemployment to go?
The faster the population grows, the smaller the labour force survey represents and, in my opinon, the less accurate it becomes .
Not necessarily. While smaller sample sizes do result in less accuracy, the change in accuracy is surprisingly small. A doubling of sample size, for example, can lead to a just barely marginal increase in the derived statistics. Ditto for a halving. A monthly sample of 60 thousand households for a population of 37 million is still larger than what many countries use for their labour force surveys.
“How many people are there in the group your sample represents? This The mathematics of probability prove that the size of the population is irrelevant unless the size of the sample exceeds a few percent of the total population you are examining. This means that a sample of 500 people is equally useful in examining the opinions of a state of 15,000,000 as it would a city of 100,000. “
This is correct. I wasn’t going to wade into frick and frack but both are incorrect. BD4L.
I dont think it will drop below 5% during this business cycle. I think the more important daa points are changes in participation rates,hours worked and hourly wages
Construction jobs are good paying. Probably why wage growth is so high, even though unemployment is rising.
Correct me if I’m wrong, but I don’t believe the *type* of job is the issue. The issue is we’re further dependent on the business of buying and selling homes for people.
Which isn’t a bad business, but what are the people going to do once they get in the homes? Buy and sell other people’s homes? It’s hard to have over one in ten people working in the same industry, unless we export. Which is why we had to resort to foreign buying.
The higher the paying the bubble-related jobs, when it pops, the worse the collateral damage.
The rule of thumb is a 50bps rise in unemployment kicks of a recession. We’re 30bps, or 60% there in just a month.
yikes! and when unemployment sinks to sub 4% levels in the U.S. , a recession is close on it’s heels.
I think the next recession, barring a black swan event,will be a profit recession like 2001 and the next recession after that, say,in 2024 will be more severe like 1990. The 1990 recession really hit Canada hard because it was not V-Shaped, the effects lingered for years
I like the cognitive dissonance
https://torontostoreys.com/2019/08/what-housing-bubble-toronto/
His name is “Shallow”. So are his arguments.
Never mind “more than 1 in 10”, 14.04% is actually about 1 in 7. So if you walk by 7 people on the street, one of them is probably involved in real estate or construction. Throw in finance and insurance to complete the ‘FIRE’ acronym (Finance, Insurance and Real Estate), and you’re almost 1 in 4 (around 23.5% last I looked about a year ago). If you wonder why central banks are so $hit scared of raising rates, that’s why. If you were to remove just 20% of the FIRE sector jobs, that’s 100K jobs. Now throw in the the spin-off job losses in restaurants, retail, etc. as those 100 thousand folks stop spending money. Then throw in the spin-off losses caused by those people not spending anymore. That multiplier effect is a byotch when it goes in the wrong direction.
Of course globalist financiers need workers to construct more 80 story luxury condos to park their illicit earnings into Toronto real estate.
Jobs are very hard to find in Toronto these days, even jobs like working in Tim Horton’s or McDonald’s.