In this week’s EconMinute, we’re talking about July Labour Force Survey numbers.
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With Canada’s and Alberta’s labour market now fully recovered, growth appears to have reached a peak. Employment was essentially flat from June to July nationally (-31k or -0.2%) and provincially (+300 or +0.01%).
At this point, nearly all provinces find their labour markets in a stronger place than before the pandemic. The unemployment rate is at least 0.5% pts below pre-pandemic levels in every province.
This is especially true in Alberta’s case. Pre-COVID, Alberta’s unemployment rate was 7.5%, 1.8% pts above the national avg. Now, it is 4.8%, in line with the national avg. The only other province close to seeing this scale of a turnaround is Saskatchewan.
This leaves Alberta with the strongest labour market it has seen in years, close to that of the early-mid 2000s. The one difference now is that this strength is seen more broadly across the country.
The great news for Albertans is that, as businesses have increased hiring over the last few months, more people out of work a long time have found employment. For the first time since COVID, Alberta’s long-term unemployment is in line with the national average and below that of Ontario.
Given their drop in participation (and the absence of an increase in unemployment) the most likely culprit seems to be ageing and retirement. Of note, this seems to be a continuation of a pre-COVID trend. Why this is different for women, however, is unclear.
At this point, the labour market looks quite different. Services industries employ fewer people (-10%) and unique to Alberta, the same is true of manufacturing (-14%). Meanwhile, industries like finance and professional services have grown in size and importance.
Looking ahead, perhaps the best news for the Bank of Canada’s fight against inflation is that there is limited evidence at this point of a wage-price spiral. Wage growth has not accelerated recently: average hourly wages were up 5.2% in July, similar to that of June.