September 23, 2011 – Weekly Market Report
A stable housing market requires a stable job market and it appears Alberta is improving in that category. Jobs bring people to Alberta which creates demand for new construction, which in turn creates more jobs. People who are confident in continued employment are much more likely to make large buying decisions (like homes).
Long-Term Unemployment Picture Improves – Dan Sumner – Economist, ATB Financial
Alberta’s labour market has made huge job gains so far in 2011, adding just over 55,000 jobs since January. But even more encouraging is that long-term unemployment, which remained stubbornly high after the recession, has started to come down.
The average duration of unemployment in the province was 14.6 weeks as of August, while in July it was only 12.3 weeks. This marks the first time since the spike in the average length of unemployment occurred during the downturn that the indicator has been below 15 weeks for two consecutive months.
Nationally, the duration of unemployment was 18.8 weeks as of August. The average length of unemployment also increased in Canada during the recession, but unlike Alberta there has not been much in the way of improvement this year (see graph).
Long-term unemployment is much more serious than short-term, as being unemployed for a long time can lead to a self-reinforcing cycle of unemployment. This can then lead to skills atrophy and longer-term social problems such as health issues and homelessness.
One main reason behind the drop in the average length of unemployment in Alberta is that youth employment has finally started to make some gains in 2011. Employment among individuals aged 15-19 reached a two year high in August (seasonally adjusted) while employment among individuals aged 20-24 has increased by 10,000 this year.
Also, employment in regions of the province which were slower to recover after the downturn (such as Grand Prairie) picked up recently. The fact the employment gains are trickling down to these segments of the labour market speaks to the broad improvement the Alberta economy has experienced recently.
