Amid gloomy signs, region’s unemployment rate plunges to 20-year low in December

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The unemployment rate in Ottawa-Gatineau dipped to its lowest point in at least two decades in December despite a continued decline in the total number of people who were working, Statistics Canada says.

The region’s jobless rate fell to 4.1 per cent last month, down from 4.4 per cent in November, StatCan said Friday. That’s its lowest level since at least early 2001, according to data from the agency.

But the picture was hardly rosy for the local economy. 

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Continuing a troubling recent trend, the overall number of employed residents in Ottawa-Gatineau fell to 753,300 last month, a slight drop from November. 

Meanwhile, the number of people actively looking for work also continued to shrink last month.

Ottawa-Gatineau’s overall labour force totalled 785,400 in December, a drop of 2,800 from a month earlier and its fifth consecutive monthly decline. 

Participation rate drops

Equally concerning was the sharp drop in the region’s participation rate, which compares the size of the region’s labour force to the region’s population of working-age residents. It continued a slide that’s seen it plunge from nearly 70 per cent in mid-2021 to 64.3 per cent last month.

It didn’t help that the region’s largest employment sector, public administration, also took the biggest hit in November, shedding 6,000 net jobs. Educational services also had a tough month, losing a net 1,800 jobs.

Big gainers included health care, which grew by a net 3,100 positions, and accommodation and food services, which added 2,300 jobs. Meanwhile, the retail sector also added 700 positions in December – perhaps not surprising as stores braced for an influx of holiday shoppers. 

But those gains could be short-lived. With the province recently reimposing tighter in-store capacity limits and banning indoor dining in the wake of surging COVID case numbers, it could be a long winter ahead for retailers and restaurants.

Nationally, the Canadian economy added 55,000 jobs in December before COVID-19 cases began spiking at the end of the month, Statistics Canada said.

The agency said in its labour force survey that the increase in the number of people working came as the unemployment rate edged down to 5.9 per cent compared with six per cent in November.

It was the lowest unemployment rate since February 2020 before the pandemic when it was 5.7 per cent.

The report was based on survey results done during the week of Dec. 5 to 11, before the public health restrictions put in place to slow the latest surge in COVID-19 cases.

Harsh winter forecast

The highly transmissible Omicron variant has fuelled a massive spike in COVID-19 cases and prompted a return to restrictions in many parts of the country that have forced many businesses to temporarily close or curtail operations.

Stephen Brown, senior Canada economist at Capital Economics, said that while the December report was positive, it seems inevitable that employment will fall in January due to the latest round of restrictions.

“The drop in restaurant visits alone is already consistent with a decline in accommodation and food services employment of 100,000, and it is likely that employment across the other high-contact service sectors will also weaken,” Brown wrote in a report.

The overall increase in jobs in December was due to a gain in full-time jobs of 123,000, while part-time employment fell by 68,000 for the month.

Average hourly wages were up 2.7 per cent compared with a year earlier.

The gain in jobs in December was driven by the construction and educational services industries.

The construction industry added 27,000 jobs for the month, its first increase since August. However, the sector still remains 41,000 below its pre-COVID-19 February 2020 mark.

Educational services gained 17,000 jobs in December.

– With additional reporting from the Canadian Press

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