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Unemployment rate still low, but faces `headwinds'

DERRICK PENNER depennter@postmedia.com twitter.com/derrickpenner

Unemployment in B.C. remained near record lows at 4.7 per cent in July, although news of layoffs and a slowing economy have crept into the overall picture.

The number is almost unchanged from 4.6 per cent in June, with some positive signs such as an increase in full-time employment and rising wages, said Bryan Yu, chief economist for Central 1 Credit Union.

“The headline is that it is still a very tight labour market,” Yu said. “(But) in the broader economy, I think there's going to be a lot of headwinds coming up.”

Headwinds such as the retirement of baby boomers outpacing new workers entering the workforce, especially in the public sector, as well as higher interest rates and inflation taking the wind out of consumer sales. For instance, online marketing firm Unbounce said this week it is cutting 47 jobs, 20 per cent of its workforce, and online retailer Article Furniture, which is eliminating 216 positions across the country, 17 per cent of its payroll, serve as examples of what is yet to come.

“That's the Shopify challenge,” said Yu, referring to the Canadian online retail giant that announced 1,000 layoffs last month because it bet that the pandemic boom in online shopping would continue.

Instead, consumers have returned to bricks-and-mortar browsing, and “there's probably more (layoffs) to come,” Yu added. “We're probably not done yet.” He also expects job losses to cascade from the slowdown in housing sales triggered by higher interest rates that put pressure on homebuyers.

Metro Vancouver saw housing sales fall 43 per cent in July from the same month a year ago, and some of the shifts in employment happened in sectors that correspond to home purchasing. Overall, B.C.'S goods-producing sector, manufacturing, construction and natural resource industries lost a little steam, shedding 2,000 jobs to leave employment at 500,000 in July.

The much larger services sector, however, added 2,500 jobs, bringing employment to 2.45 million in July, despite some pockets of weakness.

The wholesale and retail trade sectors lost 1,500 jobs, according to Statistics Canada, bringing employment down to 427,600 in July. And transportation and warehousing stayed almost unchanged with 141,000 jobs in the sector, down just 200 positions from June.

“On net, I think we'll probably start to see a little bit of erosion in the overall employment numbers,” Yu said. “But ... there's that offset in certain service sectors that are still sort of climbing,” such as tourism.

The health-care and social assistance sector saw employment slide by 9,300 positions in July, falling to 375,000, but Yu said that probably represents a loss of people due to retirement and other factors.

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2022-08-06T07:00:00.0000000Z

2022-08-06T07:00:00.0000000Z

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