Canada. Unemployment Rate Rises to 7.2 %

Employment fell by 129,000 in January (-0.8%), almost all in full time, pushing the unemployment rate up 0.6 percentage points to 7.2%. This drop in employment exceeds any monthly decline during the previous economic downturns of the 1980s and 1990s.

The loss in January follows other declines in recent months. Since October, employment has fallen by 213,000 (-1.2%), the result of full-time losses.

In January, the drop in employment was most pronounced in manufacturing, where the net loss totalled 101,000. There were declines in a number of other industries as well. The only industry with notable gains was health care and social assistance, where employment increased by 31,000.

Canada's three largest provinces accounted for the entire employment decrease in January. While just over half of employment losses were in Ontario (-71,000), there were also large declines in both British Columbia (-35,000) and Quebec (-26,000). Employment was little changed in all other provinces.

Employment fell mostly among core-age adults, 25 to 54 years, as well as among youths aged 15 to 24.

Both the public and private sectors experienced employment losses in January. While employment fell by 1.2% in the public sector, the private sector declined by 0.9%.

Compared with a year earlier, average hourly wages of employees was up 4.8% in January. The most recent increase in the Consumer Price Index was 1.2%.

Manufacturing employment falls sharply in January

Employment fell by 101,000 in the manufacturing sector in January. This was the largest monthly decline in the industry on record. The bulk of January's losses were in Ontario (-36,000), Quebec (-30,000) and British Columbia (-18,000). Factory employment was also down in Alberta and Manitoba.

Manufacturing losses in January were most pronounced in motor vehicle manufacturing. Employment also fell elsewhere in manufacturing in January, including: furniture; computer and electronic; non-metallic mineral product; electrical equipment, appliance and components; and clothing manufacturing.

In January, employment also fell in transportation and warehousing (-30,000), largely in truck transportation in Ontario. Employment in business, building and other support services declined as well in January, with losses totalling 22,000 (-3.2%). Over the last 12 months, employment in business, building and other support services has fallen by 8.2%.

Employment in health care and social assistance bucked the trend in January, up 31,000, with the largest gains in Ontario and Quebec. Since January 2008, health care and social assistance has experienced the fastest employment growth of all industries, up 5.1% (+95,000), with gains in social assistance, nursing and residential care facilities as well as hospitals.

Continued losses in Ontario

Ontario's employment drop of 71,000 in January was its largest in over three decades. This decrease pushed the unemployment rate up 0.8 percentage points to 8.0%, the highest since November 1997. Since October 2008, employment in the province has fallen by 1.9% (-125,000) and the unemployment rate has risen by 1.3 percentage points.

Employment in British Columbia fell in January by 35,000, with gains in part time more than offset by losses in full time. The province's unemployment rate jumped to 6.1%, an increase of 0.8 percentage points. Following a five-year period of sustained growth, construction employment fell for the fourth consecutive month in January, bringing total losses in that industry to 32,000 since its peak in September 2008.

In Quebec, employment fell by 26,000, all in part time, pushing the unemployment rate in January up to 7.7%. January saw large declines in public administration, following gains in December associated with hiring for the provincial election.

Bulk of employment losses among 25 to 54 year olds

Employment fell by 111,000 among the core age group (adults aged 25 to 54), with men accounting for nearly two-thirds of the decline. The unemployment rate for core-age adults jumped 0.8 percentage points to 6.2%, their highest rate since November 2004.

Youths aged 15 to 24 also experienced employment losses in January with a drop of 28,000. At the same time, a large number of youths left the labour force, nudging their unemployment rate down slightly to 12.7%.

Since October 2008, core-age adults have experienced the largest decline in employment, down 146,000 (-1.2%). Over the same period, youth employment fell by 75,000 (-2.9%). In contrast, older workers have seen modest employment gains of 8,000 (+0.3%).

Source: Statistics Canada, Febr. 6, 2009.

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