Newly unemployed find new jobs in 15 weeks on average: CIBC



    Length of unemployment remains near pre-recession mark

    TORONTO, Aug. 19 /CNW/ - CIBC (CM: TSX; NYSE) - Most Canadians who lose a
job in this recession are finding new ones almost as soon as those who became
unemployed before the downturn, according to a new report from CIBC World
Markets
    In dramatic contrast to past recessions and the current situation in the
U.S., the average length of unemployment in Canada is "relatively stable,"
says Benjamin Tal, senior economist, in the latest Consumer Watch Canada
report.
    "The average duration of unemployment is currently 15 weeks in Canada - a
modest increase from the pre-recession level of 14 weeks, and notably lower
than the increases seen in the 1991 recession. At the equivalent stage of the
1991 recession, the duration of unemployment was 20 weeks," notes Mr. Tal.
    Canada's position compares favourably to the U.S. as well where the
average length of unemployment has surged to 25 weeks, a full seven weeks
longer than pre-recession levels, and the highest rate on record, says Mr.
Tal.
    The report notes that while Canada's rising unemployment rate is
concerning, it "masks a more positive story" about the labour market. The
"long-term unemployment rate" that tracks those out of work for six months or
more is 30 per cent below the rate at the same stage of the 1991 recession.
Long-term unemployment is an important measure because the more people in that
category, the greater the impacts are on the economy. Currently about 250,000
Canadians are in this group, representing about 15% of total unemployment in
Canada.
    "Longer term unemployment was on a clear downward trend between 1994 and
the current recession, and the fact that the increase in this measure to date
has been modest at best bodes well for the relative health and dynamism of the
Canada labour market," says Mr. Tal.
    He adds that "while there is little doubt that long term unemployment in
Canada will rise over the next 12 months, the fact that the starting point is
comparatively low is encouraging."
    Meanwhile, Mr. Tal says the rate of newly unemployed Canadians is "in
line" with the pace seen in the 1991 recession. There are currently one
million Canadians who have been unemployed for less than three months. This
number represents roughly two-thirds of total unemployment in Canada and about
six per cent of the labour force.
    Mr. Tal believes that as job prospects improve the newly unemployed will
face a lower likelihood of becoming long term unemployed. In fact, the "newly
unemployed are more likely to find a job or start their own businesses within
the coming few months than they were through much of the 1990s. This bodes
well for a more normal job market recovery as opposed to the jobless recovery
that followed the 1991 recession."
    The report also notes that if the average length of unemployment hold
steady, the current wave of personal bankruptcies in Canada will be relatively
short-lived.
    Elsewhere in the report, the average length of unemployment is noted to
be the longest in manufacturing-heavy provinces with Quebec leading at 18
weeks followed by Ontario at 17 weeks. Alberta has the lowest average at 11
weeks but the span has been growing.
    The complete CIBC World Markets report is available at:
http://research.cibcwm.com/economic_public/download/cwcda-090819.pdf

    CIBC's wholesale banking business provides a range of integrated credit
and capital markets products, investment banking, and merchant banking to
clients in key financial markets in North America and around the world. We
provide innovative capital solutions and advisory expertise across a wide
range of industries as well as top-ranked research for our corporate,
government and institutional clients.





For further information:

For further information: please contact Benjamin Tal, Senior Economist,
CIBC World Markets at (416) 956-3698, Benjamin.tal@cibc.ca or; Tom Wallis,
Communications and Public Affairs at (416) 980-4048, tom.wallis@cibc.ca


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