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Local unemployment rate down in December, but lockdown brings uncertainty

Guelph's unemployment rate in December was 5.8 per cent, one of the lowest in the country
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Guelph finished off 2020 with one of the lowest unemployment rates in the country, but an analyst says taking a closer look at the most recent labour force statistics is concerning.

In the last five months of 2020 Guelph’s unemployment rate fell steadily from 11.1 per cent in August to finishing the year at 5.8 per cent for December.

With one of the lowest unemployment rate in the country, that number looks promising, said Charlene Hofbauer, executive director of the Workforce Planning Board of Waterloo Wellington Dufferin.

Looking at the rest of the stats in the survey, however, paints a less optimistic picture.

Hofbauer said the unemployment rate is the labour force force statistic most cited, but the monthly report also records actual employment numbers and the participation rate, among others.

“Unemployment rate is not our best indicator, it’s just the one we use the most, I’ll be honest with you,” she said.

The participation rate represents the total percentage of people currently employed or looking for a job in a given area. Over the course of the last five months that stat has dropped in Guelph steadily, from 69.4 per cent in August to 65.2 per cent in December.

“Traditionally Guelph has had about a 70 per cent participation rate. It’s been one of the strongest across the province for quite a while,” said Hofbauer. “Now we are more in the middle of the pack in Guelph, so the fact people are choosing to not return or have been moved off EI is quite an issue.”

She added: “As you start to not partake in the workforce it is so much harder to get back in. That to me is a bigger warning sign than the unemployment rate.”

An added complication to looking at the December labour force statistics, said Hofbauer, is that only the latter half of the month was in lockdown.

“January will be a much more accurate view of what is starting to happen because we will really see the effect of it as we keep moving forward,” said Hofbauer. “While the unemployment rate is going down and we are seeing that number falling I am really concerned about the participation rate and what is happening there. We will have to see how January’s numbers go.”

Hofbauer said it’s hard to say for sure if the lockdown will cause participation rates to continue to fall in January 

“March to May last year we saw a lot of employment levels fall across a number of industries. This is the second time around, so maybe some of this industries won’t have the same level of drop off that they had,” she said.


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Kenneth Armstrong

About the Author: Kenneth Armstrong

Kenneth Armstrong is a news reporter and photojournalist who regularly covers municipal government, business and politics and photographs events, sports and features.
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