Not A Good Thing

From Muir’s Desk

According to the stats provided by the Cameron Muir, Chief Economist at the British Columbia Real Estate Association thinks it’s looking good for job creation if your math skills are minimal.

Muir Thoughts

Referring to the Canadian Labour Force Survey & US Non-Farm Payrolls – January 6, 2012 Muir says this:

“After two straight months of declines, the Canadian labour market showed some modest strength, adding 18,000 new jobs in December. However the Canadian unemployment rate ticked higher to 7.5 per cent as employment failed to keep pace with an expanding labour force. For the year, Canadian employment growth was just 1.2 per cent. Employment in BC was strong in December with 11,000 new jobs created. Employment growth over the last 12 months in BC was a modest 1.4 per cent, just slightly higher than the Canadian national average. The provincial unemployment rate ended the year at 7 per cent.”

“Finally some positive news in the United States labour market as 200,000 new jobs were added in December, well above market expectations of 150,000 jobs. The strong rate of job growth in December pushed the unemployment rate to a three-year low of 8.5 per cent.”

Arithmetic

Did you get this answer? We added 18,000 jobs but the unemployment rate increased which means overall job levels are down.

Keeping the arithmetic simple – what does add up is that if net jobs are decreasing, one might assume that means there will be fewer people who can afford to buy a home. Surely, this won’t be a good thing for the Vancouver real estate market?

Copyright British Columbia Real Estate Association. Reprinted with permission. BCREA makes no guarantees as to the accuracy or completeness of this information.

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*Disclaimer: Statistics Courtesy REBGV. While believed to be accurate they are not guaranteed.
**Numbers provided may vary as they are dynamically posted by the REBGV.

Reader Comments:

Bally Says:
January 6th, 2012 at 5:44 pm

Hmmm. I agree with your overall message Larry but can’t really understand how having more people employed means there are “fewer people who can afford to buy a home”.

Even if the employment rate falls as a percentage because of growth in the labour force there are still 11,000 extra people employed in BC.

That’s 11,000 potential client for you 🙂

January 7th, 2012 at 8:23 am

@Bally

maybe I got it wrong, it happens 🙂
While the report says 11000 more the overall NET is down. I understood that to mean Peter took some away from Paul.

604serf Says:
January 7th, 2012 at 10:06 am

@Bally

Seriously though, either way, I think we are well beyond the point where people that just have jobs in Vancouver can afford to buy.

Prices are so out of line with fundamentals, the employment figures barely matter.

Olga Says:
January 7th, 2012 at 11:11 am

Show the part of the stats that you like and omit the negatives – it is called manipulation.
The unemployment is UP in Canada and in BC. 25.500 full time and some number of the part time jobs was lost with 43.100 part time jobs created so the quality employment is down by 6% – and guess what – the part time jobs people are not likely to be qualified for ANY mortgage as they are usually low paying jobs.

January 7th, 2012 at 11:28 am

@Olga
“Show the part of the stats that you like and omit the negatives – it is called manipulation”

Would you like to clarify where you are going with that statement!
Are you saying Muir hasn’t told us the whole story? If that’s the case then please note he has referenced the “Canadian Labour Force Survey & US Non-Farm Payrolls – January 6, 2012” both of which in their entirety would not be read here.

As to “are not likely to be qualified for ANY mortgage as they are usually low paying jobs” – you have confirmed the point of my message. Thanks.

Olga Says:
January 7th, 2012 at 1:27 pm

No, I did not meant that Muir hasn’t told us the whole story, because even though he quoted some facts from the stats report, the people that wrote the report did is somehow very vague.
I saw this report – there is just not enough information in it and what they show is seasonally adjusted, so most likely we see the part of the truth as all of these stats reports are very politically charged.
What is more reliable is the raw data for a year over the year results and it is here:
http://www.statcan.gc.ca/daily-quotidien/120106/t120106a4-eng.htm
and unemployment rate grew by 0.1% with very few full time jobs added (0.1%) and more part time jobs added (1.6%), which is typical for this time of the year. And I agree with you that it does not spell good for RE market.

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