Saturday, July 11, 2009

Toronto's Jobless Rate nears double digits

There's a ton of spin happening in the media of late, taking bad news and sifting through it in hopes of finding something golden amongst all the dross. Such is the case with reports that Canada's unemployment rate climbed to 8.6% in June. And for those in Toronto the number is butting right up against double digit territory at 9.6%.

The positive spin we're hearing is that while 7,400 Canadian jobs were lost in June, the number is far lower than what had been expected. Media is touting the fact that most economists were predicting job losses to number in and around 35,000 for June. Thus a "mere" 7,400 is being welcomed as a potential sign that the worst of the recession is behind us.

Its almost like stepping in a steaming pile of dog poop, and then being happy that instead of a brand new pair of shoes being soiled, its a ratty old pair of loafers.

But looking behind the numbers its easy to see the potential for continued stress on Canada's economy for the immediate and near term. While the job loss numbers have slowed at least temporarily, much of the credit can go to self-employment and the part-time workplace.

Typically those who create their own jobs, or who choose to take on part-time employment, can expect to see substantially lowered incomes. Workers with less money in their pockets are not going to be out and spending to the degree they would be if they felt secure in full-time and remunerative employment.

Picking up a newspaper or flicking on a news station, Canadians can be forgiven for thinking that our economy is poised to rebound, that housing values are going to start soaring and that good times are just around the corner. But a healthy dose of cynicism isn't a bad thing either, especially with the prospect of higher taxes, higher interest rates and declining real estate values a very real possibility in the years ahead.

Toss in all the talk of a "jobless recovery" and Canadians can be forgiven for shunning debt while seeking new ways to save their cash instead of spending it.

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