London's unemployment rate rising

HANK DANISZEWSKI

, Last Updated: 9:52 AM ET

It's Thanksgiving, but Londoners have no reason to be thankful for the latest job numbers.

Unemployment in the London-St. Thomas area edged up in September for the tenth straight month -- to 11.2% from 11.1% -- despite a surprising drop in both the national and provincial rates.

"London is threatening to become the land that recovery forgot," said Douglas Porter, deputy chief economist for BMO Capital Markets and a London native and University of Western Ontario graduate.

Statistics Canada said Canada's unemployment rate fell last month for the first time in nearly a year to 8.4% from 8.7%. Ontario's jobless rate fell from 9.4 % to 9.2%

London's jobless rate remains the second highest of any major centre in Canada, next to Windsor where the rate dropped to 14.3% from 14.8%.

Porter said the London numbers are discouraging, noting the area didn't benefit from an increase of 26,000 manufacturing jobs across the country.

London's rate also rose despite 1,200 people leaving the job market last month. In the last year, the local labour force has shrunk by 5,700. The bad news comes just two days after city council unanimously approved a $55-million plan to rebuild the local economy.

Mayor Anne Marie DeCicco-Best said the city's economy would be re-oriented towards knowledge-based and "green" jobs.

"There is no point in re-establishing the same type of jobs when clearly that's not where the future lies," she said.

DeCicco-Best took a swing at the FedDev Ontario program announced last week that will initially deliver $40 million in federal economic assistance to an area stretching from Windsor to Ottawa, where the jobless rate last month was only 4.8%.

DeCicco-Best said she has repeatedly told federal officials she's skeptical FedDev will help London.

"If we get all $40 million I would say 'yes'. But if the $40 million has to stretch over a wide area, that will not help the hardest-hit area, which is between London and Windsor, " she said.

Nancy McQuillan, executive director of the London Employment Help Centre said it's the toughest job situation she has seen in the city over two decades.

She said some people laid off from manufacturing sector are retraining and finding jobs but others are just hanging on, waiting for recovery.

"They have to take entry-level jobs just to survive until the market opens up and for some reason it has not opened up in the London area yet," she said.

The centre is handling 1,500 clients a month at two locations.

McQuillan said many of the agency's clients are surprisingly upbeat but the long recession is taking a toll on their spirits.

"When these stats come out every month it's enough to make anybody lose hope," she said.

In addition to Windsor, unemployment was down last month in Kitchener, Toronto, and Oshawa. The rate was unchanged in St. Catharines and up in Hamilton.

But the official rates are deceiving, Windsor's drop was mainly due to 2,400 people exiting the labour force, while more people were looking for work in Hamilton last month, pushing the unemployment rate up.

On the national front, Porter said the news was "unambiguously good."

The September jobs pickup of 30,600 was several times larger than the economist consensus forecast, which along with a slight decrease in the number of workers looking for jobs, helped drop the national unemployment rate by 0.3 percentage points. It was the second consecutive month of employment gains.

"The broad brush here is one that's completely consistent with an economic recovery," said Porter.

Statistics Canada said 91,600 full-time jobs were added in September and the actual hours worked increased 1.6%.

By contrast, the United States is still reporting massive monthly job losses, even though most believe the economy there has turned the corner and begun to grow.

Its unemployment rate is 9.8%, 1.4 points ahead of Canada's.

Porter said the turnaround in manufacturing numbers and the overall gains in Ontario should eventually filter through to London. But he said many companies in the London area that target the export market are threatened by continued weakness in the American economy and the surging loonie, which is approaching parity with the US dollar.

Canada's trade deficit widened to $2 billion in August, up from $1.3 billion in July.

Tim Carrie of the Canadian Auto Workers union said London plants, such as truck wheel manufacturer Accuride, are especially vulnerable to the rising loonie.

hank.daniszewski@sunmedia.ca


Videos

Photos