The ÎÚÑ»´«Ã½ labour market saw a robust growth in employment in the month of August after five months of flat performance.
On a seasonally adjusted basis, the number of people employed increased by 0.4 per cent or 12,000 people to reach 2.788 million and lift year-over-year growth to 1.5 per cent.
The participation rate was unchanged for the month. The labour force grew only 0.3 per cent monthly (slower than the growth of employment), which resulted in a decrease in ÎÚÑ»´«Ã½’s unemployment rate to 5.2 per cent in August from 5.4 per cent in July.
That said, full-time employment declined 1.1 per cent or 24,200 people month to month, compared to a 6.6-per-cent increase in part-time work, suggesting some deterioration in job quality. Full-time employment was still up one per cent or 21,000 people compared to the same period last year. Part-time work was up 3.7 per cent or 21,100 people on a year-over-year basis. This divergence also reflects some job quality deterioration.
The Vancouver Census Metropolitan Area recorded a 0.2-per-cent increase in employment from the previous month, while the unemployment rate was up to 5.8 per cent in August from 5.5 per cent in July, in contrast with the provincial decline.
By sector, goods-producing sectors saw employment inch up. A surge in forestry, fishing, mining, quarrying, and oil and gas employment was offset by declines in construction (down 0.8 per cent), manufacturing (down 0.9 per cent) and utilities (down 2.2 per cent). Services-producing sectors recorded growth of 0.5 per cent. Leading these gains were transportation and warehousing (up 11,100 people or 8.3 per cent), educational services (up 10,200 people or 4.8 per cent) and business, building and other support services (up 4,800 people or 5.7 per cent). Offsetting these gains are employment declines in health care and social assistance (5,700 people or 1.5 per cent) and information, culture and recreation industries (4,600 people or 3.5 per cent).
While ÎÚÑ»´«Ã½’s unemployment rate edged lower this month despite the growing labour force, it is still well above recent lows. It is expected to rise in the near term as the economy slows further.
Lower Mainland home sales slowed sharply in August as the Bank of ÎÚÑ»´«Ã½’s successive June and July hikes lifted variable rates, while higher fixed rates punted more prospective buyers to the sidelines. MLS residential home transactions in the area spanning Metro Vancouver and Abbotsford-Mission fell 5.1 per cent from July to 3,574 units – a smaller decline that is typical of August. This followed a sharper-than-normal pullback in July. On a year-over-year basis, sales were up 25 per cent, but that’s in contrast to low year-ago sales and is down from a 32-per-cent year-over-year increase the prior month. August 2023 sales were roughly in line with August 2019, but below the 2010-19 August average of 3,800 units.
The reduction in sales flow has quickly deflated market conditions to a more normal pace and there are signs that more sellers are testing the market, potentially reflecting the weight of higher carrying costs on investments. New listings rose 28 per cent year over year, and while not especially high for this time of the year, the pace has steepened quickly, adding to existing inventory. Active listings rose to the highest level on a seasonally adjusted basis since early 2021 and the sales-to-active listings ratio has retreated to a level more consistent with a balanced market. It could shift into buyers’ market conditions.
That said, the average home value continued to edge up during the month despite reduced sales: Up 0.7 per cent to $1.18 million, which is below early-summer levels. The price is 5.6 per cent above a year ago but about 10 per cent below the pandemic peak. While holding steady in August, this could reflect sales composition as entry-level buyers are priced out, leaving those with more substantial downpayments and higher price points in the market. The benchmark price fell 0.4 per cent.
Bryan Yu is chief economist at Central 1.
