By Greg Quinn, Vancouver Sun | Link to Article
By Greg Quinn, Vancouver Sun | Link to Article
Bank of Canada Governor Stephen Poloz angered many young job seekers last week by suggesting those still living in their parents’ basements should consider unpaid work. The good news is, they may not have to.
Young people are on pace for the biggest annual jobs increase since 2002, Statistics Canada data show. In September and October, employment in the youth category — 15 years old to 24 years old — increased by a combined 47,400, the second- highest two-month total since 2006 and about 40 per cent of the total 117,200 net new jobs across all categories.
“They’re definitely getting out of the basement,” said John Clinkard, chief economist at Deutsche Bank Canada in Toronto. “When you create 100,000 jobs in two months you use up some slack. As demand increases you’ll start to absorb these less skilled workers.”
The improvement in youth employment is part of a broader trend that is making it more difficult for Poloz to say there is “material slack” in the jobs market, part of his base case for keeping borrowing costs near historically low levels. National unemployment fell to 6.5 per cent in October, the lowest in six years, Statistics Canada said Nov. 7.
Poloz said last week Canada’s economy may need prolonged monetary stimulus, and “discouraged worker effects” point to a job market that’s weaker than the unemployment rate would suggest. He also predicted it would take two years for the economy to return to full output. The recent jobs upturn may erode his case.
“I wonder whether he can remain this dovish for much longer,” said Doug Porter, chief economist at BMO Capital Markets in Toronto. “If we see real improvement in the broader job market, like night follows day, we will see improvement in the youth labour market as well, and that’s effectively what we have seen over the last year.”
Youth have accounted for 35 per cent of the 201,000 jobs created so far in 2014 in Canada, said Matthieu Arseneau, senior economist at National Bank of Canada in Montreal, who called it “a positive development as the unemployment rate for this group has room to improve further.” The gain of about 71,000 jobs for youth so far this year is faster than any annual gain since 2002.