They called it the “Target effect” when the giant U.S. retailer came to Canada a couple of years ago and helped drive down consumer prices.
A new version might be: Driving up job losses.
The impact of Target Corp.’s shutdown in Canada, along with the loss of jobs at Future Shop, appears to be showing up in the latest jobs numbers, as The Globe and Mail’s Tavia Grant reports today.
Canada lost 19,700 jobs in April, according to Statistics Canada, as full-time work climbed by a healthy 46,900 but the country shed 66,500 part-timers.
The unemployment rate held steady at 6.8 per cent.
Statistics Canada’s “trade” measure, which includes the retail sector, lost 20,500 positions, a figure observers linked to the hit from Target and Future Shop.
“The reported closure of several stores by a couple of major retailers likely had a negative impact on employment -- which was captured by the 21,000 decline in the ‘trade’ category,” said National Bank senior economist Krishen Rangasamy.
My colleague David Parkinson scoured the numbers and found that 14,200 jobs were lost among “retail salespersons, sales clerks, cashiers, including retail trade supervisors,” not seasonally adjusted.
Job losses were expected, but April’s cuts were deeper than anticipated.
“Consensus was looking for at least a small setback, given some expected pullback from March’s good gain and from Target’s closure in this report -- in fact, employment in retail and wholesale trade fell 20,500, not far from the estimated 17,500 job loss at the retail chain,” said chief economist Douglas Porter of BMO Nesbitt Burns, referring to the consensus among economists for today’s report.
“We had expected a weak report with the one-two punch of the Target layoffs and some payback from March’s artificial strength,” he added.
Notably, too, the jobless rate in Alberta also held steady, at 5.5 per cent, as gains in part-time work far outpaced the loss of full-time positions in the oil-shocked province.
Jobs were also cut by budget-wary governments.
Here’s another noteworthy tidbit: The number of hours worked picked up by 0.3 per cent from March, “a much stronger showing than in previous months and a sign of stronger wages and salaries growth,” said David Madani of Capital Economics.
Over the course of the past year, employment in Canada is now up 0.8 per cent, or by 139,000 positions, all in full-time work.
In the United States, the picture was somewhat mixed.
“Although non-farm payrolls increased by a relatively healthy 223,000 and the unemployment rate edged down to a seven-year low of 5.4 per cent, April's employment report was otherwise something of a mixed bag,” said Paul Ashworth of Capital Economics.
“All things considered, any lingering possibility of a June rate hike from the Fed is now off the table, with September probably the most likely lift-off date now.”