Alberta unemployment rate falls to lowest level in nearly a year and a half

Alberta's unemployment rate fell last month to its lowest level since February 2020, as more people found full-time work and the province eased public health restrictions.

The unemployment rate dropped to 8.5 per cent in July, down from 9.3 per cent in June.

It's the lowest the rate has been since COVID-19 rattled the province in March 2020, when unemployment jumped to 9.1 per cent from 7.5 per cent a month earlier.

Alberta's unemployment rate later climbed to nearly 16 per cent.

"We're moving in the right direction," Rob Roach, deputy chief economist at ATB Financial, said of the Alberta figures in July's labour force survey from Statistics Canada.

"However, it is still high and that means there's a lot of Albertans still struggling to find work and really get traction in the labour market."

Alberta's lower rate is a reflection of both job growth and fewer people participating in the labour market.

The number of seasonally adjusted jobs in the province grew by 12,300 — a monthly growth rate of 0.6 per cent, according to ATB Financial. 

The increase was largely due to the addition of 20,100 full-time jobs. The number of part-time jobs dropped during the reporting period, which took place from July 11 to 17.

"As the economy reopened and as things have generally been picking up, I think some people maybe left their part-time job and picked up full-time work," Roach said.

"One of the things that may not be obvious to people outside those running the businesses is there are some labour shortages — restaurants, for example, having trouble getting people, finding people to come take part-time work."

The unemployment rate in Edmonton fell to 8.8 per cent in July, down from 9.7 per cent. But it ticked upward in Calgary, climbing to 9.8 per cent from 9.2 per cent.

In Lethbridge, the unemployment rate dropped to 4.5 per cent, down 1.4 percentage points.

Charles St-Arnaud, chief economist at Alberta Central, the central banking facility for the province's credit unions, said one area of concern in Alberta is continued underperformance in terms of hours worked and wage growth.

"This suggests that there is still weakness in the labour market and some underperformance in the economy more broadly," St-Arnaud wrote in an analysis Friday.

He said wage growth for permanent workers in Alberta declined by more than three per cent, year over year, and continues to underperform the national measure.

Meanwhile, uncertainty surrounds the pace of economic recovery, nationally and internationally, as new variants of COVID-19 raise questions about trade growth.

There's also fierce debate about Alberta's decision to lift all of its COVID-19 health restrictions.

The province continues to trail the national unemployment rate, which fell to 7.5 per cent in July.

Nationally, employment rose by 94,000 last month, far fewer than what economists were expecting.

Sherry Cooper, chief economist for Dominion Lending Centres, said the new national figures were a little disappointing, but she was pleased to see the gains in full-time employment.

"One very positive bit of news for Canada has been … our vaccination acceptance is much higher than in the United States and many other countries," she said.

"So we should see a continued recovery, albeit it's going to be a slow one, unfortunately."