A brief primer on job numbers, part one
The unemployment rate is the number of people actively looking for work expressed as a percentage of the labour force.
By ATB Economics 29 March 2020 2 min read
Job numbers, such as the unemployment rate and monthly employment gains or losses, are important to track in general, but with the COVID-19 pandemic in play, it’s extra important to know how the labour market is changing. With this in mind, it’s a good time to review some of the key concepts behind the numbers.
The most timely source of Canadian job data is the monthly Labour Force Survey (LFS) conducted by Statistics Canada. The next results come out on April 9 and will be based on the employment conditions prevailing during a reference week in mid-March.
With major containment efforts in Alberta not peaking until after mid-March, we will have to wait until the release of the April results (which will be on May 8) before the statistics will show the full effect of COVID-19 on the labour market.
The unemployment rate is one of the most closely-watched statistics collected by the LFS. Perhaps the first thing to note about the unemployment rate is that it’s not a measure of the number of people collecting Employment Insurance, which is typically much lower than the number of people who are unemployed.
The unemployment rate is the number of people actively looking for work* expressed as a percentage of the labour force. The labour force is everyone 15 years of age and over with a job or looking for work. As such, if there are 90 people with a job and 10 looking for one, that means there are 100 people in the labour force and the unemployment rate is 10 per cent.
People who are retired, in school full-time, on maternity or parental leave, unable to work for health reasons, or “discouraged” from looking for work because they believe no suitable jobs are available are not considered unemployed.
*More precisely, “unemployed persons are those who, during reference week, were without work, were available for work and were either on temporary layoff, had looked for work in the past four weeks or had a job to start within the next four weeks.”
A note on COVID-19: The COVID-19 pandemic is having a major impact on the economy here in Alberta and around the world. The Owl will report on these impacts when good information is available while continuing to track regularly scheduled releases of economic data and long-term trends.
For additional information on COVID-19 and advice for the public, please visit Alberta Health Services. Please go to atb.com for COVID-19-related updates from ATB Financial.