Weak job market leaves more youth unemployed
A weak Canadian job market failed to live up to forecasts in February, shedding 2,800 jobs and leaving an increasing amount of young people out of the workforce, according to statistics released Friday.
The unemployment rate dipped slightly to 7.4 per cent last month as 37,900 people -- almost all in Ontario-- stopped looking for jobs.
A labour market shrinkage usually implies discouraged workers are giving up on finding a job, not a good sign for a month in which economists were expecting a modest addition of 15,000 jobs.
Prime Minister Stephen Harper said the figures were "disappointing," but he pointed to improved U.S. job numbers and a net growth in full-time jobs as reasons to remain optimistic.
Still, Harper promised to address the sluggish numbers in the next federal budget, due March 29.
"There will be a lot of measures in the budget to create jobs and get us on a long-term sustainable track," he said in Toronto.
Friday's Statistics Canada release was the latest in several months of poor job creation numbers, with young workers seeing the worst of the hard times. People between the ages of 15 and 24 saw their age group lose 26,800 jobs over the month.
According to a TD Bank report released Thursday, there are 250,000 fewer young workers employed now than before the recession of 2008 and 2009.
The reason why the job numbers for youth have been bleak is because they are more vulnerable when hard times hit, according to an economist.
"They have less tenure, less skills, less experience," Francis Fong, from TD Economics, told CTV News Channel Friday.
The glum numbers are the latest of a seven-month stretch where job creation has become stagnant in Canada. Job growth, a critical pillar in improving economic conditions, was strong immediately after the recession, but soon began slowing.
But according to Fong, the tough job market for young people could act as a "trigger" that results in a more educated workforce in the future, since more youth are retooling their education.
"That's not necessarily the worst thing in the world," he said.
Additionally, Fong said that the youth unemployment rate in Spain is 52 per cent, meaning Canadians are fairing well compared to some countries.
However, Fong said that youth job numbers are often the last indicator to improve after an economic recovery. He pointed to the early ‘90s recession, when it took five years for youth employment figures to improve after the recession ended in 1992.
When looking at the past year, employment has risen by 121,000, but only 26,000 of that took place over the past seven months, according to Statistics Canada.
That means an average of only 3,000 jobs per month have been created across the country since the summer.
Ted Menzies, the minister of state for finance, agreed that youth employment was an issue, but he stressed that creating a business-friendly environment is key, because it allows employers to hire younger workers in addition to keeping on current staff.
Menzies added that the government has pumped millions into programs aimed at getting younger people working, such as the Canadian Youth Business Foundation.
But to keep up with Canada's increases in population, the economy would have to create between 15,000 and 20,000 jobs per month.
February's biggest losers were in the wholesale trade and retail sectors, which lost about 37,000 workers. Transportation and warehousing; and health care and social assistance were next, both categories losing about 22,000 jobs.
Despite the grim prospects, there were some areas where employment rose. Finance, insurance, real estate and leasing added 41,000 new gigs, reversing half the losses caused by five months of decline over the month of February alone.
Educational services, business, building and other support services, natural resources, construction and manufacturing all saw modest gains as well.
Ontario's labour market shrinkage represented the only significant movement in the provincial figures, a notable 40,500-person decline in the labour force. The reduction in those seeking jobs helped drop that province's unemployment rate to 7.6 per cent.
Paul Ferley, assistant chief economist at RBC Economics, said that historically low interest rates are Ottawa's way of "pulling out all the stops" to ensure that the nascent recovery gains more traction.
"With that, you'll get general job creation that will benefit all age cohorts."
With a report from The Canadian Press