No news is good news—at least when looking at the headline employment data. Statistics Canada (Stat Can) data shows that both the number of jobs and the unemployment rate were unchanged in February. Looking past the headline data was less flattering, revealing that more people opting out of the workforce is the primary reason for little movement. An issue that was particularly troubling when looking at the data for young adults.
Canadian Employment Unchanged, Nova Scotia An Exception
Canadian employment barely budged last month, which is good news considering the environment. Seasonally adjusted employment added 1k jobs to hit 21 million in February. Considering the agency’s margin of error was 32x larger than last month’s gains, it’s probably best to focus on the trend rather than a single-month.
Only one province showed a substantial negative movement: Nova Scotia. Employment fell 0.8% (-4.3k jobs) last month, while all other provinces remained unchanged.
Canada’s unemployment didn’t budge much. The seasonally adjusted unemployment rate remained 6.6% in February, about 0.7 points higher than last year. The rate has improved recently but it’s still 0.7 points higher than last year. Experts generally believe an increase of 0.5 points is enough to trigger a recession within 12-18 months.
Headline Employment Data Less Flattering With Workforce Shift
The headline data looks less benign under the hood. Last month the agency estimated the population grew by 47.4k people, but its net labor force shrunk by 16.8k people in that span. Canada’s youth population was of particular concern, which added 5.5k people to its population—but shed 35k from the workforce. How is that possible? Well, this is an issue of the participation rate.
Canadians Are Opting Out of Work, Especially Young Adults
The participation rate is the share of people in the population who are actively involved in the labor market. It includes those employed and those actively seeking work, and available during the survey’s “reference week.” Retirees are obviously not a part of the labor force, however, neither are full-time students seeking work—until they’re employed. Adults who don’t have a job, want one, but aren’t actively looking—aren’t considered unemployed. They’re deemed non-participants in the workforce.
Canadian jobs and unemployment barely budged, but participation decreased sharply. The participation rate fell 0.2 points to 65.3% in February, representing two-thirds of the decline over the past year. The trend is particularly concerning for youth participation, which fell 0.8% in February. The decline was larger than the reduction in the demographic’s unemployment, while its population climbed 5.5% over the same period.
The job report may seem boring, or even good considering the geopolitical headwinds. However, there’s some significant concerns brewing regarding the job data and population growth. Until recently, the big concern was the country was adding people faster than its economy could allocate those resources. That problem still remains, the unallocated resources just shifted from those who are actively seeking jobs to those who are no longer seeking employment. That’s still the same issue when it comes to economic growth.
Sounds good for rents. The gov should tax us more to shelter more people that can’t find a job with their “degrees” in nonsense.
Yes, fewer young people should be going to university. They should instead do useful things like getting their real estate licenses and becoming social media influencers…education will never enrich your life nearly as much as becoming a cog in the wheel of the mindless, eternally expanding consumption machine. Anyone who says otherwise is a hippie communist who should go back to Russia.
Nice to see some analysis on the greater context. Most of these factors can be optimized for positive reporting, but there’s still signs the issue remains.
Unfortunate that hardline data is now so politicized that the nuanced discussion to actually resolve an issue is now impossible. The data is either perfect or abysmal to most people, since the issue of resolving it secondary to their emotional addiction to tribalism. The problem here is it’s not your issue now, but eventually it might be—and that will be due to the negligence of solving it early.
That’s me. Been unemployed 1.5 years. Worse than the great recession which was 6 months and I graduated into it. Worse than Covid also. Meanwhile we have governments bent on making it worse for us with strict DEI and population growth beyond job growth. The two combined is hunger games. I know many experienced professionals in the same boat. Giving up goals of family, homes, even dating, anything really. The new thing is how to figure out how to live alone in poverty… because this is Canada. There’s no DEI for people unemployed forever or maybe even homeless, for some reason, they’re not victims. The people making these rules and policies never have to live under them and never have to face challenges or face hardship. They just pat themselves on their backs all the time. They are the truly privileged.
Increase immigration to fix the labor shortage crisis!!
Many colleges are in need of more students.
Gerald Haw, “emotional addiction to tribalism” was too beautifully put to not be applauded.
I do not for a second believe there are 21 million employed people in Canada.