The overall number of jobs gained or lost is very important. It is also important whether those jobs created were full-time or part-time positions. Full-time employment gains are a key generator for income and confidence. Thus, strong full-time job growth indicates robust economic growth. It is important to examine the breakdown by industry and province to see where jobs are being created or lost.
A steady decline in unemployment or the unemployment rate indicates continued strength in economic growth, which may be inflationary if the labour market is tight or the economy is operating near capacity. This could prompt the Bank of Canada to increase interest rates.
Changes in the size of the labour force can affect measured unemployment. During a significant downturn, some of those unemployed may stop looking for work and as a result, would no longer be considered a part of the labour force. This could lead to a drop in the rate of unemployment even though the labour market is weakening.
