../Morning Post
Posted October 30, 2009
Human Resouces

Payroll employment, earnings and hours for August 2009

Statscan - Non-farm payroll employment fell by 110,200 in August (-0.8%), following an increase of 27,300 in July. Half of the overall change in August came from a drop in educational services, as payroll employment in that industry returned from unusually high levels in July.

These data come from the Survey of Employment, Payrolls and Hours (SEPH). SEPH is a business survey that provides a detailed portrait of employees from an industry perspective, complementing information on total employment from the Labour Force Survey (LFS), which is a survey from a household perspective. Over the longer term, the estimates from the surveys move in similar directions, but the month-to-month changes in the estimates can differ in the short term (see section Comparing SEPH and LFS).

While education accounted for the majority of the decrease in August, SEPH also recorded declines in other industries. In August, 216 of 305 industries covered by the survey posted losses. This was the largest number of industries with declining payroll employment since January 2009, when 229 industries shed jobs.

In addition to the decline in educational services in August, there were widespread losses across the goods and service sectors.

Payroll employment fell in most provinces in August, with the largest declines in Ontario, Quebec and Alberta. At the same time, the number of payroll employees rose in Prince Edward Island and Newfoundland and Labrador.

Since the peak of employment in October 2008, the number of payroll employees has declined by 492,600 (-3.3%). Declines over this period have been particularly sharp in the goods sector, where the number of employees has fallen by 11.3%. In the service sector, payroll employment has declined by 1.8%.

Average weekly earnings of payroll employees stood at $828.14 in August, up 2.0% from August 2008. This was down from the most recent year-over-year peak of 3.0% in October 2008.

Service sector losses

The number of payroll employees in educational services fell by 54,400 in August, following an increase of 32,400 in July. Since the peak of payroll employment, the number of employees in the overall education sector has fallen by 0.9%, less than the national all-industries (-3.3%) decline over the same period.

Reported data for July and August reveal changes in payment schedules compared with previous years in a number of school boards. This resulted in an unusual increase in the number of employees remaining on payrolls between June and July, followed by a sharp decline between July and August.

Elsewhere in the service sector, there were declines in payroll employment in grocery stores (-4,500), full-service restaurants (-3,800), other financial investment activity (-2,900), employment services (-2,200) and business support services (-2,100). All of these industries have experienced declining payroll employment since the start of the economic downturn, with the most pronounced losses in employment services, down 28,800 (-16.3%), followed by full-service restaurants, down 14,600 (-3.4%).

There were some industries which added jobs in August. Notable payroll employment increases were found in traveller accommodation (+2,800) and scheduled air transportation (+2,500). There were also job gains in general medical and surgical hospitals in August (+1,400).

Goods sector losses

Payroll employment fell by 28,100 in the goods sector in August, with the largest losses occurring in non-residential construction (-1,600), electric power generation, transmission and distribution (-1,400), non-ferrous metal production and processing (-1,400) and oil and gas extraction (-1,300).

The number of employees in motor vehicle parts manufacturing increased by 1,900 in August.

Highway, street and bridge construction also added 1,400 employees in August.

Average weekly earnings

Average weekly earnings of payroll employees stood at $828.14 in August, up 2.0% from August 2008. This was up from the 1.6% growth observed between July 2008 and July 2009, but lower than the most recent year-over-year peak of 3.0% in October 2008.

Among Canada's six largest industrial sectors, between August 2008 and August 2009, average weekly earnings increased in public administration (+5.5%), educational services (+4.9%), health care and social assistance (+3.2%), and accommodation and food services (+0.2%).

Over the same period, average weekly earnings fell in manufacturing (-2.4%) and retail trade (-1.5%).

Prince Edward Island saw the fastest increase in average weekly earnings between August 2008 and August 2009, up 4.2%, followed by Newfoundland and Labrador (+3.9%) and Quebec (+3.8%). Ontario (+1.6%) and Saskatchewan (+1.3%) had growth below the national average. British Columbia (-0.1%) was the only province to post a decline in average weekly earnings over the period.

Total hours

Total hours worked including overtime by hourly paid employees fell by 5.0% between August 2008 and August 2009. This was the sharpest year-over-year decline in total hours worked since the start of the economic downturn.

Comparing SEPH and LFS

Data on employment, wages and hours worked are produced by two major Statistics Canada monthly surveys: LFS and SEPH. The estimates differ for conceptual reasons and for methodological reasons. The information source is the key distinction between the two surveys. SEPH provides information related to occupied jobs based on a census of administrative data from businesses, whereas LFS provides information on the employment characteristics of individuals based on a survey of households.

As a result, from time to time, the estimates from the surveys can differ in the short term as indicated in the chart below. This year, over the summer months, SEPH and LFS showed different movements in payroll employee counts and in total employment. Some of this can be explained by the fact that SEPH shows payroll employment over the entire month, while the LFS reflects labour market conditions only for the middle of the month.

Because it covers the entire month, SEPH detected some payroll employment in education early in July, which was not found later that month with the LFS. In August, there was a subsequent decline in SEPH to more typical summer levels, a change which did not occur in the LFS.

In August, the LFS showed an increase in the number of paid employees (+38,000) while SEPH shows a preliminary decline of 110,000. However, between May 2009 and August 2009, LFS paid employment fell by 86,000 whereas SEPH fell by 97,000, a difference of only 11,000.

Non-farm payroll employment of the Survey of Employment Payrolls and Hours and total employment of the Labour Force Survey

Note to readers

Unless otherwise specified, data in this release refer to payroll employment and earnings data obtained from the Survey of Employment, Payrolls and Hours (SEPH).

Each month, Statistics Canada now provides enhanced analysis of the current labour market situation, using SEPH and other sources. The Labour Force Survey (LFS) provides the first picture of overall labour market conditions, with unemployment and total employment and who is affected by changes in the labour market. Later in the month, Statistics Canada provides additional detail by industry through the SEPH Daily release, and regional detail through the Employment Insurance statistics.

With the release of January 2009 SEPH data on March 31, 2009, an improved estimation method for earnings and hours data was introduced and estimates back to 2001 were revised to ensure continuity in data series.

Data on the education sector

Changes in payroll employment in education during the summer months can be affected by changes in payment schedules and school-year calendars. Month-to-month changes should therefore be interpreted with caution, and more attention given to long-term trends.

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