OTTAWA — Canada’s manufacturing heartland continued to feel the full force of the economic downturn after suffering another month of massive job losses in May, pushing the national unemployment rate to an 11-year high.
But economists saw glimmers of improvement in the numbers, and noted that a sharp slowdown in employment losses in the United States augurs well for the Canada’s trade-dependent economy going forward.
“The worst is behind us,” declared Bank of Montreal chief economist Sherry Cooper in a note forecasting the end of the recession in the second half of the year.
“Unemployment will remain high for some time, likely peaking in mid-2010 . . . (but) it will feel much better.”
For the moment, there is no doubt both Canada and the U.S. remain in the throes of one of the fiercest slumps since the Great Depression of the 1930s.
In Canada, another 41,800 jobs disappeared in May, and in industrial Ontario, which is feeling the recession’s sting the most, 59,700 were lost in the month, almost all full time and in the manufacturing sector, particularly auto-related.
May’s job losses pushed up the national unemployment rate to 8.4 per cent — the worst since 1998 — and Ontario’s to 9.4 per cent, a 15-year high.
Yet that represents a vast improvement from the dark days of winter, when the recessionary winds blew at their hardest. Since March, Canada has been shedding jobs at the rate of 20,000 a month, compared to 90,000 per month earlier.
Federal human resources minister Diane Finley said while the losses were “regrettable,” more of Canada’s laid-off workers are now getting EI assistance.
“We can assure Canadians of one thing: They are getting better response from the (employment insurance) system,” she told the Commons. “Over 75 per cent of Canadians who lose their jobs today have easier access to EI. They have it for a longer period of time than they would have just last fall.”
The Canadian Auto Workers union said 18,000 of the 41,800 workers who lost their jobs in May are not eligible for EI benefits under what the big industrial union called the country’s “fracture” unemployment benefits system.
“It’s absolutely disgraceful and gut-wrenching to see so many unemployed workers in this country suffering because they simply can’t access basic EI benefits under our broken system,” CAW president Ken Lewenza said in a release.
In reviewing the jobless report, economists said it was encouraging to see eight of 10 provinces with a modest job pick-up.
If Ontario was not included in the latest numbers, Canada would have experienced its second monthly gain in jobs.
The parting skies were more pronounced in the U.S., despite a jobless rate of 9.4 per cent that was the worst in a quarter century.
May’s 345,000 employment decrease was the best performance in eight months.
“The light at the end of the tunnel just got a lot brighter,” said Nigel Gault, chief economist with IHS Global Insight in New York. Although he added that “manufacturing remains a black spot.”
Manufacturing remains pitch black in Canada as well, and is unlikely to get any brighter soon, noted CIBC economist Krishen Rangasamy, echoing Bank of Canada governor Mark Carney’s warning that the surging loonie could strangle recovery in manufacturing-heavy central Canada.