Canadian Employment Continues to Reel in March

• Unemployment rate rises to 8.0% as 61,300 jobs shed in March.
• Manufacturing and construction clipped severely with full-time jobs and prime-aged males hardhit.

Canada shed 61,300 jobs in March, contracting for the fifth consecutive month, and the national employment rate rose to 8.0%. Employment for core-aged workers (25-64) continues to plunge, and full-time jobs in the goods sector were the focus of the month's losses.

Already facing a long-run decline, manufacturing sector job losses have accelerated, losing 127,800 jobs since last March, and the sector accounted for over 55% of Canada's year-over-year job losses. The manufacturing sector constituted 15% of Canadian employment in 2000 but now comprises only 11%. With ongoing uncertainty in the auto sector, this sector's job losses will mount in the months to come. Despite March's temporary uptick in monthly housing starts, construction employment contracted by 18,200 jobs on the month. The housing boom is clearly over and we anticipate that construction employment will face a protracted slump. The commodities downturn is also walloping the natural resources sector with deepening job losses of 10,500 this month. With these sectors contracting, unemployment among prime-aged males has surged upwards by 270,000 since September with over 914,000 males aged 15 to 65 now unemployed.

Regionally, we are seeing the first synchronous decline in employment since the early 1980s. Alberta saw 14,900 jobs shed on the month - nearly 20,000 in full-time work - but the Alberta's losses were concentrated in construction and trade. The commodities plunge has singed oil and gas employment, but the broader Alberta economy is also reeling. B.C. shed 22,600 jobs, with the losses concentrated in the construction sector (-16,000). Ontario's monthly loss of 10,800 jobs belies that whopping weakness in full-time work, as nearly 40,000 full-time jobs were shed, led by declines in the manufacturing and financial sectors. Québec was not as deeply stung this month but has still contracted by nearly 50,000 so far this year. This will deepen as its manufacturing sector, particularly its aerospace industry, feels increasing pressure from slowed export markets. The Atlantic provinces also contracted and only Newfoundland and Labrador felt a significant uplift.

With employment having contracted 272,000 in the first 3 months of 2009, we regard this only to be around the half-way mark for 2009 job losses, which we estimate will total over 520,000. We still expect losses, albeit at a slower pace, through the next three quarters, anticipating the unemployment rate will rise to 10% by year's end. There is still much pain ahead and, along with the hard-hit export sector, job losses have now infected domestic sectors.

TD Bank Financial Group

The information contained in this report has been prepared for the information of our customers by TD Bank Financial Group. The information has been drawn from sources believed to be reliable, but the accuracy or completeness of the information is not guaranteed, nor in providing it does TD Bank Financial Group assume any responsibility or liability.