Sunday, November 06, 2011

Crazy Jobs loss Report - Stats Can Oct 2011

Statistics Canada released it's typically unbelievable and unreliable monthly jobs data on Friday November 5th. In this bizarre report the bumbling bureaucracy told us in their standard tone of brash certainty that 61,000 jobs were created in September and then in an about face 54,000 jobs were immediately stripped away in October.

Nobody really knows the exact numbers. Jobs data is developed through a series of survey samples across the country and then the small sampling of data is extrapolated to produce this national data which is presented as if it were a hard fact. Of course they offer the standard disclaimer that "estimates are based on a sample, and are therefore subject to sampling variability" however the media, markets and public policy makers tend to ignore the disclaimer to such extent that world markets and governments can rise and fall before 9 am on the news release date.

As an employment guy, I can tell you that job creation in October was not as robust as we expected but a one-month loss of 54,000 is not a credible number. More realistically, job gains have moderately out-paced job losses over the past 6 months with subtle shifts in job types and locations. These wildly fluctuating numbers that are reported by Statistics Canada are more likely a flaw in the data collection methods than a reflection of employment reality.

The Conference Board of Canada produces a summary table of Canadian economic data. When all the data is reviewed on balance, it helps us believe that the job market is probably not a roller coaster ride of neurotic employer hiring and firing.

In this self described experts opinion, temporary and contract jobs are on the rise. The unstable Euro-zone, rising government debt and the stagnant US economy cast a shadow of uncertainty that causes most employers to hedge against their lack of visibility into the medium term future. Businesses need to get the work done, orders and cash are flowing but given the constant stream of conflicting news, employers are reluctant to make job offers in the form of traditional "permanent" employment. There is an increasing number of professionals working as contractors in the fields of engineering, oil & gas, mining, transportation, manufacturing, financial services and property. There is also an increasing number of plant and factory workers who are employed week to week and month to month.

On the workforce supply side, there is also a rise in contract and term employment due to the tenacity of older workers. Freedom 55 is a dream that has not been realized by many boomers whose investment savings are less than they had hoped for due to poor performances of their investments in the equity markets. A few extra years of contract work may not be absolutely necessary before retirement but they are necessary before a "comfortable" retirement. Boomer tenacity also puts extra pressure on young workers who find themselves competing with more experienced workers who also have a more flexible employment outlook.

Smart employers will continue to use contract, term and temporary workers. As time passes and as they become more certain of the long-term nature of their needs, employers will gradually convert these workers to more traditional employment relationships . Job seekers are wise to embrace these contingent employment opportunities as their path to experience and future career employment.

Contrary to the opinions of some, the employment market is not all doom and gloom. Its just different than we expected in would be in an economic recovery. Those who adapt to change, show flexibility and embrace the reality will likely end up with a better life-style and greater prosperity than prior generations, just like every generation before them.

Commentary by: Steve Jones, President - The People Bank, Aimco Staffing and Allen Professional Search (Divisions of Design Group Staffing Inc.)

Sources: The Conference Board of Canada; Statistics Canada; CMHC Housing Time Series Database.

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