Business

Soaring jobless rate seen as sign of optimism

Central 1 Credit Union chief economist Helmut Pastrick. - File
Central 1 Credit Union chief economist Helmut Pastrick.
— image credit: File

Metro Vancouver's unemployment rate spiked to 9.2 per cent last month but one economist says the big increase doesn't mean the region is slipping back into recession.

The Metro jobless rate is up 2.3 percentage points from 6.9 per cent in November and the overall B.C. rate is up to 8.8 per cent in January from 7.0 per cent in November, according to Statistics Canada.

Helmut Pastrick of Central 1 Credit Union said the jump looks alarming.

But he takes it as an upbeat sign thousands of unemployed people who had stopped looking for work – and weren't captured by older statistics – are now resuming their job hunt because they're more confident there's work to be found.

"The labour force participation rate is now the highest it's been in more than a year," Pastrick said. "That's typically viewed as a positive sign. It means more people are looking for work."

Many of those re-entering the work force may not be a family's main breadwinner, he says, but a spouse who works part-time when possible to bring in extra income.

More younger people are also likely looking again, he said.

An extra 8,900 jobs were counted in B.C. in January, although almost all of them were part-time.

The level of part-time work still remains at near-record levels, Pastrick said, adding he'd hoped to see more converted to full-time employment by now.

But he expects the unemployment rate to decline in the months ahead, as more jobs are created and the overall B.C. economy grows by an estimated 2.9 per cent this year.

Pastrick noted Statistics Canada's jobless rate is seasonally adjusted and can be quite volatile, so he wouldn't be surprised if the high January figure proves something of a blip.

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