Alberta Unemployment rates in 2015
Jan 08, 2015
Todd Hirsch, the Chief Economist at ATB Financial, reviews Alberta’s unemployment outlook for 2015:
Alberta’s unemployment rate in November was 4.5 per cent, a rate considered healthy and balanced. But as low oil prices start to grip the labour market in 2015, it’s anticipated that the unemployment rate will start to rise. What can we expect?
The long-term trends in unemployment show repeating, predicable patterns. Since 1976, there have been five times when the unemployment rate has surged: ‘82, ‘85, ‘91, ‘01 and ‘09. In each case the rate of unemployment shot up quite suddenly and then took many months—and in some cases years—to return to healthier levels.
Unemployment peaked most dramatically during the economic recession of the early 1980s. In August 1981 the rate sat at an extremely low 3.3 per cent, but only a year-and-a-half later it was above 10 per cent. It peaked at an all-time high of 12.4 per cent in September of 1984. Then it took over four years for the rate to drop back to a balanced 5 per cent.
This pattern of rapid spikes followed by gradual reductions is because of the way companies lay off staff. They typically hold on to workers as long as possible, but at some point are forced to reduce staff en masse. When hiring begins again, it’s more gradual. This could be expected in 2015. It’s difficult to say for sure, but if past experience is any indication, unemployment could rise to around 6 or 7 per cent very quickly.
Original Article can be found here.