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Labour force information
Not for release before 7 A.M. E.D.T. Friday, April 7, 2006
Week ending March 18, 2006

Analysis — March 2006

Employment increased by 51,000 in March, bringing total gains from 12 months ago to 330,000 or 2.1%. The unemployment rate declined 0.1 percentage points to 6.3%, a 32-year low.

The employment increase in March pushed the Canadian employment rate up 0.1 percentage points, to a record 62.9%. The employment rate is the share of the population aged 15 years and over that is employed.

Canada has traditionally had higher employment rates than most other countries in the Organization for Economic Co-operation and Development (OECD). However, with stronger employment growth in this country, the rate in Canada has pulled further ahead of the OECD average in recent years. Canadians aged 16 and over have been more likely than Americans to be employed since November 2002.

Most of the employment gain in March was the result of an upswing of 44,000 in full-time work. This continues the long-term trend toward full-time employment growth in this country. Despite monthly fluctuations, part-time employment has remained around the same level for the last three years.

The youth labour market continues to gain strength. The employment increase in March among young people aged 15 to 24 years brings total gains since September 2005 to an impressive 4.1%. The March employment gain among youth was primarily in Ontario.

Ontario posted the bulk of the employment gains in March, following little growth over the previous four months. Despite continued declines in manufacturing over the past 12 months, employment growth has been strong in construction as well as in several service industries.

Employment also increased in British Columbia, bringing the unemployment rate to 4.4%, breaking the 30-year low set the previous month.

As the labour market tightens, wages continue to rise. The average hourly wage in March was up 3.5% from 12 months ago, well in excess of the most recent 2.2% increase in the Consumer Price Index. Hourly wage rate growth continues to be highest in Alberta, at 7.0%.

Large gains in Ontario

Employment in Ontario increased by 31,000 in March, primarily driven by gains among youth (+22,000) and mostly full-time. The March increase in youth full-time employment in Ontario was concentrated among 18 to 24 year-olds. The strike action that temporarily closed Ontario college facilities may have given many youths more time to work at a paid job.

The March employment gain in Ontario brings employment growth for the last 12 months to 115,000 (+1.8%). Despite a large decline in manufacturing, strength in construction and a number of service-based industries provided overall employment gains for this province. For example, there have been gains of 44,000 in educational services and 30,000 in finance, insurance, real estate and leasing since March 2005.

There were also employment gains in British Columbia (+13,000) in March. This brought the unemployment rate to another record low, as it declined 0.4 percentage points to 4.4%. Over the past year, British Columbia has recorded the fastest rate of employment growth of all provinces at 4.0% (+85,000), with gains primarily in retail and wholesale trade; information, culture and recreation, and construction.

As the economy continues to boom in Alberta, employment edged up in March, bringing gains in the past year to 65,000, (+3.7%). Over the last twelve months, employment gains were in construction; professional, scientific and technical services; public administration as well as natural resources.

There were also a few provinces with declines in March. Employment in Newfoundland and Labrador declined by 3,000 in March, following little growth over the last year. The unemployment rate increased 0.6 percentage points to 15.7% in March.

Although employment in Manitoba declined (-3,000) in March, it was still up 7,000 (+1.2%) compared to one year ago. During this time, much of the employment growth has been concentrated in trade as well as transportation and warehousing.

Employment also declined in Prince Edward Island (-1,000), bringing the unemployment rate to 12.0% in March, a 1.1 percentage point increase.

Youth employment gaining momentum

Employment among youths aged 15 to 24 years increased by 33,000 in March, continuing the upward trend that began in the fall of 2005. This month's increase brings total employment gains for youths up 4.5% (+110,000) over the last twelve months. The youth unemployment rate was at 11.5% in March, among the lowest rates in the last 15 years.

The youth employment increase in March was primarily full time and among 18 to 24 year-olds. Although the majority of the employment gains for youths were in Ontario (+22,000), there were also more youths employed in Quebec (+10,000).

In March, women aged 25 and over also experienced employment increases (+21,000). For adult men, full-time gains offset part-time losses, leaving employment little changed in March. Employment gains in the last year for adult women (+1.9% or +120,000) were somewhat higher than those of adult men (+1.4% or +101,000).

The number of employees increased by 87,000 in March, offsetting losses of 36,000 self-employed. Over the last 12 months, the number of employees has increased by 318,000 (+2.3%), mostly in the private sector.

Growth widespread across several sectors

Employment in information, culture and recreation increased by 17,000 in March, mainly in Ontario and British Columbia. Despite this increase, employment in this sector remains at similar levels to a year ago.

There were more people working in health care and social assistance (+17,000) in March. Over the past year, there has been an increase in hospital employment, offsetting declines in other parts of the sector.

There were 15,000 more employed in ‘other services’ in March. This sector includes industries such as repair and maintenance services, and personal, laundry and private household services. With this increase, employment is back to levels recorded three years ago.

Employment increased by 14,000 in business, building and other support services in March. This brings employment gains for this industry to 32,000 (+ 5.0%) from one year earlier.

Transportation and warehousing employment increased by 12,000 in March. This sector has picked up strength in the last year (+5.0%), due to gains in transit and ground passenger transportation as well as postal services.

Employment in natural resources continued to climb, with a gain of 10,000 in March. Employment in this sector is up by 26,000 compared to a year ago, primarily the result of strength in the oil and gas sector in Alberta.

Manufacturing employment continued to decline in March (-12,000). Since the end of 2002, employment in manufacturing has fallen by 8.2%, with 189,000 fewer people working in this industry. Although a large decline, it is not as severe as the previous manufacturing contraction over the same span of time during the early 1990s, when employment fell by 15.1%, (-320,000).

Note to readers

Comparing current LFS estimates to those prior to 1976

In recent months, the Labour Force Survey (LFS) has been reporting very low unemployment rates. The rates have been so low that some LFS users want to understand the historical context in which these rates are presented. Caution must be stressed when comparing recent LFS employment and unemployment estimates to those prior to 1976 – when the questionnaire underwent significant changes.

The 1976 LFS questionnaire introduced direct questioning to determine labour market status. This replaced the “main activity” style of information previously recorded. In 1975, both the new and old questionnaires were run in parallel. An analysis of the impact on employment and unemployment estimates showed that the new questionnaire measured more employment, especially among youths and women. It also picked up more unemployment, most notably among women.

At the time of the conversion to the new questionnaire, a historical series was created by adjusting pre-1976 estimates of employment and unemployment using factors determined from the parallel run. Ratios were applied to the 1966 to 1975 data to make them more (but not strictly) comparable to the new estimates. Although these adjusted 1966 to 1975 data are available, users should still be cautious when comparing the two periods because of the different questionnaires used to measure employment and unemployment. Approaching 1966, further caution should be used.

Chart 2Employment and unemployment indicators, Canada, seasonally adjusted
Chart 3Employment and unemployment indicators, Canada, seasonally adjusted
Chart 4Index of employment by industry, Canada, seasonally adjusted, January, 2003=100
Chart 5Index of employment by industry, Canada, seasonally adjusted, January 2003 = 100
Chart 6Index of employment by industry, Canada, seasonally adjusted, January 2003 = 100
Chart 7Index of employment by province, seasonally adjusted, January 2003 = 100
Chart 8Index of employment by province, seasonally adjusted, January 2003 = 100

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Date Modified: 2006-04-07 Important Notices