State of the labour Market

September Labour Force Survey Preview: Length of Jobless Spells Keeps Falling

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Duration of unemployment has plummeted in B.C. and Quebec, but remains elevated in oil-producing provinces.

Canadian job growth over the past year has maintained a solid trend, and these gains are now starting to result in progress in previously lagging aspects of the labour market. One encouraging sign has been a reduction in the average duration of unemployment. Last September, typical jobless spells over the prior 12 months averaged 18.8 weeks. Since then, the average duration of unemployment has fallen to 17 weeks.

Nationwide, jobless lengths haven’t yet returned to the 14.9-week lows hit at the onset of the 2008 financial crisis. However, in some places, they’re getting close. Outside of oil-producing provinces, the average duration of unemployment over the past year was just above 16 weeks, less than a week longer than its early-2009 low. Jobless lengths in these regions are down six weeks from their post-recession high, with more than a third of the drop occurring over the past year. B.C. and Quebec have led the recent decline in unemployment duration, consistent with their strong employment gains over the past few years. 

Unfortunately, this progress hasn’t been felt across the country. The average duration of unemployment in oil-producing provinces like Alberta, Saskatchewan, and Newfoundland stands just above 21 weeks, barely any improvement since their deterioration following the fall in oil prices. If other regions’ recent experience is a guide, oil-rich provinces are going to need a sustained pick-up in job growth to get jobless spells back to their previous levels.

A stronger labour market shouldn’t just mean less chance of becoming unemployed. We also want to see those unlucky enough to lose their jobs find new work quickly. On a positive note, provinces with improving labour markets are now seeing lengths of unemployment spells falling. The challenge is that too many regions in Canada aren’t experiencing employment growth at a rate fast enough to help cut jobless lengths. 


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