The media has grown weary of the whole concept of inflation or hyper-inflation so this week they have latched onto the new Evil Specter in the woods, Unemployment.
On Friday Stats Canada announced the monthly Labor Force Figures for December 2008 and it was as expected a bad report. We saw Employment figures dropping by 34,000 from November to December but a drop in Full Time positions of over 71,000 (these full time losses were “equalized” by 37,000 part time positions starting). The drop in Full Time positions is what scares me, what is a “part time” jobs and how many of them add up to a “full time” job?
More interesting was the year over year numbers posted:
Employment growth from December 2007 to December 2008 was 0.6% (+98,000), much slower than the increase of 2.2% (+358,000) observed over the same period in the previous year. From the record low of 5.8% in early 2008, the unemployment rate had climbed 0.8 percentage points by the end of the year, with most of the increase occurring in the last quarter.
I believe we are in a recession now folks, bad employment and bad growth, seems to suggest that, these numbers just confirm the observation.
The unemployment rate now sits at 6.6% and no one is saying this is the top of the curve (given the bottom was at 5.8% I think there is considerable more growth in this area to come, as a member of the group).
Many of the pundits are talking unemployment rates nearing 8 or 9% possibly in the depths of this economic downturn, I am hoping they are being a little too pesimistic, but some areas are bound to be hit hard:
- High Tech markets are disappearing at the Macro level (i.e. large telecommunications, large manufacturers).
- If Gas prices remain low most of the energy businesses and thus the whole “Green” industry may come to a screaming halt as well (it’s just too cheap to NOT use gas).
- As wallets become lighter and lighter all consumer based spending areas like retail are going to get hit as well.
Looks like this is going to be a long one, is it time to panic? Nope, but it is time to plan for the Worst and hope for the Best (as a wise man has told me before).
Housing Price Drops?
Not really but yesterday Stats Can did put out some interesting data about New Housing Prices.
The New Housing Price Index increased year-over-year by 0.7% in November, a slower pace than the 1.5% advance recorded in October and the smallest 12-month increase recorded since August 1999.
Prices decreased 0.3% between October and November, resulting in a New Housing Price Index of 157.6 (1997=100). This was the second consecutive monthly decrease at the Canada level.
It was interesting to see that the one area of Canada that saw meteoric price increases was St. John’s Newfoundland. Given the relatively depressed prices in previous years and now with the growth in industry there, this may be an interesting trend to watch. I know a lot of people who left Newfoundland to find work in Ontario, but now they may not be able to go back, because it will cost to much to move back home!