Quebec unemployment rate reaches record low especially for prime-age workforce

MONTREAL — Quebec’s unemployment rate hit its lowest level in decades in May, helped by full employment for the prime workforce aged 15 to 54 years.

Six per cent of Quebecers were unemployed, the lowest level since Statistics Canada started collecting the data in 1976.

The dip from 6.6 per cent in April was partially due a decrease in the number of people seeking work.

However, among prime-age workers the unemployment rate dipped to a low of 5.8 per cent.

“We’ve never seen this before so it’s a pretty good report,” said National Bank of Canada chief economist Stefane Marion.

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He said full employment for this key age group is important because they have the biggest propensity to obtain credit in the low interest rate environment.

Across Canada, full-time employment for prime-aged workers rose 31,000 in May, the sixth robust increase in seven months. Over this period, 196,000 jobs for this age group have been created, the best such performance in 20 years.

Marion said Montreal was the big winner in Quebec last month because for the first time in the province’s history more people are working in the city than in all of Quebec.

Immigration has been a powerful contributor, he added.

“The success story of the Canadian economy is really the immigration policy targeted towards economic immigrants. That’s why we distinguish ourselves from the rest of the OECD.”

Quebec Finance Minister Carlos Leitao said the provincial economy is heading in the right direction after 165,000 jobs have been created since May 2014.

Leitao also said fears of a downturn in the U.S. economy this year are unfounded.

“There is uncertainty surrounding 2018 and 2019,” he said. “But in 2017 the U.S. economy is ticking over really well.” 

Desjardins Group senior economist Joelle Noreau said the enthusiasm about Quebec’s low overall unemployment rate should be tempered by the fact it’s just 0.6 per cent lower than April.

Ontario experienced a similar decrease in April but the unemployment rate then rose 0.7 per cent in May to 6.5 per cent despite creating 19,900 new jobs.

“We may be next in line for a short-term correction similar to what Ontario experienced,” she wrote in a report.

In May, Quebec’s 29,800 gain in full-time jobs was offset by a decrease of 14,900 part-time employment.

The biggest gains in employment were in the transportation and warehousing sectors, professional, scientific and technical services along with health care and social assistance.

The improved jobs picture and growing consumer confidence is helping the residential sector which is resulting in a six per cent increase in Montreal area home prices, Noreau said.

Marion said the Bank of Canada needs to adjust its message by acknowledging that the Canadian economy is doing well.

“We anticipate a more hawkish message from (Bank of Canada Governor Stephen) Poloz in July as he must now prepare households for a rate hike,” he wrote in a note to clients.

Follow @RossMarowits on Twitter.

Ross Marowits, The Canadian Press