Labour Force Survey Analysis –  October 2016

Employment surges for the second straight month, thanks to part-time job creation

Canadian Labour Market

After remaining flat for most of 2016, Canadian labour markets have roared to life (in a relative sense) late in the year. The Canadian economy added 43,900 net new jobs in October, building on the 67,200 positions created in September. Canada has created more jobs in the past two months than in the previous fifteen.

Employment Canada Chart

Unfortunately, that fact says more about the previous 15 months than the most recent two. Even with the gains since August, Canada is still on pace for annual employment growth of only 0.6 per cent in 2016 - not even enough to absorb all the new entrants into the workforce.

Also dampening the enthusiasm for October was the fact that, once again, job growth was dominated by part-time positions. In the past two months, literally all of the net new jobs created were part-time. About 111,200 part-time jobs have been added since August, while 100 full-time positions have been lost.

In spite of the addition of 111,100 jobs in just two months, the unemployment rate has remained stubbornly fixed at 7.0 per cent since August. The recent improvement in (part-time) job prospects has encouraged some Canadians who had given up looking for work to try their luck again in the job market. As a result, the steady decline in the labour force participation rate that we observed through the spring and early summer has reversed itself. More Canadians looking for work means the unemployment rate tends not to fall, even though employment levels are up.


October's job gains were concentrated in Ontario and BC. Ontario employment was up for the third month in a row, with the province adding 25,400 new jobs last month (0.4 per cent growth). Since July, there have 52,100 new jobs created in Ontario. For its part, BC employment rose by 14,900 positions (a 0.6 per cent increase), breaking a four-month streak of effectively zero job growth in that province.

There was also some welcome news in Alberta, where the province may have finally hit bottom and begun the path to recovery. After losing more than 63,000 jobs from September 2015 through July, provincial employment is up for the third consecutive month in October.

Although overall employment was up, the industry-level performance was decidedly mixed. Of the fifteen major industrial sectors, only five were up in October, while the others were flat or lower. Leading the way on the positive side was construction (23,800 new jobs), followed by wholesale and retail trade (18,800), education (15,800) and resource-extraction industries (10,200). Meanwhile, there were job losses in a range of business services; accommodation, food and cultural businesses; as well as manufacturing and health care.

Employment Growth by Sector

Manufacturing Sector Labour Market

October's decline in manufacturing employment (7,500 net jobs lost) ended a three-month streak of steady job gains. However, employment remains well below levels seen in late 2015 and the first few months of this year. As a result, year-to-date manufacturing employment is down about 0.5 per cent compared to the first 10 months of 2015.

Mfg Employment in Canada

October's decline in manufacturing employment was concentrated in Ontario, where 6,500 net jobs were lost. The number of manufacturing jobs was also lower in Alberta, Saskatchewan and New Brunswick. Although down from September, manufacturing employment in Alberta is about the same as it was in July and August, providing some hope that better days are ahead for manufacturers in the province. In both Saskatchewan and New Brunswick, October's job losses were relatively small and followed a surge in employment in September.

Meanwhile, manufacturing employment was higher in BC and Quebec. In the case of BC, manufacturing job gains were not quite enough to offset losses in September, while in Quebec, job gains continued a trend of steady, if modest employment growth in the sector.

Mfg Employment Growth

Through 10 months, Nova Scotia is Canada's fastest-growing manufacturing province, with employment about 3.6 per cent higher compared to the same period last year. In fact, manufacturing jobs are up in all three Maritime Provinces. Employment is also higher in Ontario and Quebec, but down across western Canada. Losses are particularly acute in Alberta, where manufacturing employment is down by almost 17 per cent compared to the January-October period last year.


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