“The last employment report before the October 19 federal election has to be disappointing for the Harper campaign,” said Dr. Sherry Cooper, chief economist with Dominion Lending Centres
. “The unemployment rate edged up to 7.1% - slightly higher than the 7% posting in August - and employment grew a mere 12,000, in line with modest expectations.”
While economists are predicting a pick-up of the economy in the second half of 2016, it may be too little too late for the federal Conservatives, who pride themselves on fiscal responsibility and economic growth – and seem to be taking the fall for low oil prices, Dr. Cooper told MBN.
“The government can’t control the price of oil,” she said. “And although consumer confidence is rising, it looks like we are heading for a minority government.”
According to Dr. Cooper, a majority government is what mortgage brokers need.
“A majority Conservative government ideally, followed by a majority Liberal government,” she said. “Otherwise, we are looking at uncertainty.”
According to Chen Hoon Lim, mission chief for Canada at the International Monetary Fund, Harper’s Tories shouldn’t be looking to the housing and mortgage industry for examples of economic strength.
“There are some vulnerabilities in the housing sector; we saw household debt has climbed up to a historical level,” said Lim at Bloomberg LIVE’s Canadian fixed income conference. “One of the things the new government will have to think about is: We need to support growth, but at the same time we need to address the vulnerabilities in the housing sector.”
Job seekers have reason for optimism as the number of labour force participants increased last month, said Dr. Cooper, with some discouraged workers resuming their job search.
But the type of jobs that are being filled is a matter for concern, she pointed out.
“Another negative note was sounded as part-time employment rose by 74,000 - not a good sign,” said Dr. Cooper, who says those numbers are virtually offset by a disappointing 62,000 decline in full-time employment.
For alternative lenders, there is good news for those who cater to the Business-For-Self client, as the number of self-employed workers increased.
“This rounds out third quarter employment growth at only 31,000 - below the meager 32,000 gain in Q2 and the 63,000 rise in Q1, neither of which were stellar quarters,” she said. “In September, all of the net job growth was among people aged 55 and older and was little changed for other demographic categories. Clearly, many boomers prefer to continue working either by necessity or choice – probably a combination of both.”