Province’s jobless rate jumps to 5.3 %
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Manitoba’s unemployment rate jumped from its historic low last month, and the number of jobs in the province fell, according to Statistics Canada data released Friday.
The province fits a nation-wide trend, suggesting a slowing economy amid rising interest rates.
Manitoba’s unemployment rate hit 5.3 per cent in August, an increase of 1.8 percentage points from July’s record-breaking 3.5 per cent.
Meantime, employment dropped to 663,000 jobs, down 1.5 per cent from July.
“I don’t find (it) very surprising at all — it’s to be expected,” said Melanie O’Gorman, a University of Winnipeg economics professor.
Canada typically doesn’t see unemployment rates below five per cent, O’Gorman said. Winnipeg’s was 4.3 per cent last month, on a three month moving average.
Manitoba’s unemployment rate was 5.3 per cent last March before dipping lower in the spring and early summer. Pre-pandemic, it hovered around five per cent.
O’Gorman believes it could continue to rise alongside Bank of Canada interest rate hikes. The number of jobs may continue to decline, she noted.
Still, she doesn’t fear a significant recession.
“There’s so much demand, given the end of COVID-19 (restrictions), that I think that will prevent (a) recession,” O’Gorman said. “If there is a recession, I don’t believe it will be a deep one.”
Canada’s economy is beginning to show signs of weakness, said Sal Guatieri, a BMO senior economist.
“The economy was doing very well up until a couple months ago and now seems to have hit a pothole,” he added.
Manitoba posted 10,000 job losses, month over month, in Statistics Canada’s August labour force survey. It’s the first notable decrease since last March.
More than three-quarters of the losses — 7,600 — came from the educational services sector.
The Manitoba Teachers’ Society said it’s not facing a noteworthy shortage of teachers, though it could use more substitutes. The association represents 16,000 teachers.
Employment declines in educational services included university professors and educational support jobs in elementary and secondary schools, said Kathleen Marriner, a Statistics Canada communications officer.
“A rise in this category of unemployment… (indicated) that many people without permanent/indeterminate contracts were waiting to start work during the reference period of the August survey,” Marriner wrote in an email.
Statistics Canada’s survey took place from August 14 to 20.
“The sense I get when I go out and talk to businesses, which I’ve been doing most of the summer, is that they’re all short (staffed),” said Chuck Davidson, the Manitoba Chambers of Commerce’s president.
He estimates the average business is lacking 10 per cent of its workforce. As a result, manufacturing companies aren’t accepting as many contracts, restaurants have cut hours and hotels have reduced services.
Companies may decrease the number of jobs available as wages and interest rates increase, on top of spiked goods and operating costs, Davidson said.
However, he expects it’ll be more likely for businesses to raise prices for customers — they need staff to keep the company running.
“If you’re willing to show up for work on a regular basis, there should be no problem getting employed in Manitoba,” Davidson said.
Nationally, the number of job vacancies exceeded people looking for work in June, according to Statistics Canada’s most recent data on the subject.
Canada’s unemployment rate jumped to 5.4 per cent in August, the first hike in seven months. The country lost a net 40,000 jobs last month, though educational services — accounting for 50,000 job losses — could be seasonal and reverse later.
Manitoba’s unemployment rate may rise further as immigrants enter the province and take time to integrate, noted Loren Remillard, the Winnipeg Chamber of Commerce’s CEO.
“Without (immigration) for a number of years, (Canada’s) pool of employees has effectively sustained or somewhat shrunk,” he said.
The number of retiring Canadians has skyrocketed— there were 307,000 Canadians who’d done so within a year, as of August. A year earlier, the number was 233,000, and in August of 2019, it was 273,000.
Nearly 12 per cent — 11.9 — of permanent employees planned to leave their job within a year, Statistics Canada’s August report found.
Nationally, hourly wages rose 5.4 per cent year-over-year in August. Canada’s inflation rate leapt 7.6 per cent year-over-year last July.
— With files from the Canadian Press