Quebec's Job Market Makes Up Some Ground in August

Though progress is modest, employment growth in August showed some positive signs. The decline in private sector employment over the past three months ended, while the manufacturing sector expanded in August and year-to-date.

However, although the unemployment rate has stabilized overall, it remains very high among young people ages 15 to 24, at 11.1% in August vs. 12.3% in July, compared to 4.7% among the population ages 25 to 54. The employment rate has declined in all age groups over the past year but has fallen furthest among young people (-4.9 points). As Statistics Canada points out, it has been a difficult summer for students seeking employment.

Some industries, including accommodation and food services and "other services," which are more directly dependent on consumer demand, continue to face challenges. Purchasing power is being eroded by the rising cost of living (shelter in particular), curbing activity in sectors that depend on discretionary spending.

The record growth in the working-age population (2.6% year-over-year) is far outpacing the lacklustre gains in employment (0.3%) (graph). The labour market has slackened considerably, as evidenced by the gap between the lower number of vacant positions and the 33% year‑over‑year increase in job seekers. This is likely to mitigate wage pressure in the coming quarters. 

We need a more credible improvement in employment—especially in the private sector—to be convinced that Quebec's job market has overcome its challenges and is back on a positive path. August's gains remain modest, and the private sector has lost 47,500 jobs year-to-date.

Although the labour market continues to soften and a few more months of rebalancing are likely, we still believe that Quebec's economic outlook is positive (see Desjardins Leading Index External link.). The unemployment rate is expected to approach 6%, before starting to improve (see our most recent forecasts External link.).