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Someone please tell the jobs market we’re not in a recession

Canada may not be in a recession, but the employment market is sure acting like it is. The headlines have been bad enough, with oil sands players like Suncor and Nexen slashing payrolls, and Target Canada unloading 17,000 workers as it slumps its way out of town.

But the economic data shows it, too. Annual employment growth, as measured by Statistics Canada, has been below 1 per cent for the past 15 months, which is the first time that’s happened outside of recessionary times in about four decades.

But hey, at least Spring’s finally here, right?

You have to go back to the height of the 2008-09 financial crisis and ensuing recession to see a worse jobs performance. And things were even darker back in the early 90s, when that recession led to three years of declines.

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We’re certainly not there, but the books may not be closed on the whole recession thing, either, as the price of oil bumps along at $47 a barrel. You might be celebrating that fact as you fill your SUV for a song, but in terms of national jobs figures, it’s bad news.

More pain to come?

For now, forecasters seem to be calling for better times, but they’re being cautious about it.

“In 2015, the employment outlook is expected to be slightly brighter, although some factors will likely drag on jobs growth as well,” says Julie Ades, senior economist at Conference Board.

She says the picture isn’t likely to get worse, thanks in large part to the bump we should be getting from the stronger economy south of the border. But the Conference Board’s projection of 0.95 per cent jobs growth for 2015 is hardly bullish, either, continuing to tread below the Canadian population growth rate.

Other observers are also signaling a slightly optimistic tone.

In its closely-watched forecast, Manpower said Canadian employers expect a “modest” hiring climate over the second quarter, with 18 per cent of companies expecting to add workers in the second quarter, while 5 per cent expect to cut back.

Deloitte, in a survey of chief financial officers, found that expectations for domestic hiring among Canadian companies rose 2.2 per cent in the fourth quarter, although that was down from a 3.5 per cent increase in the prior three months.

So the sentiment seems to be that things have to get better, but that there aren’t any clear signs it’s happening yet.

Oil price continues to be the elephant in the room

And then there’s that oil price, which has cut the legs out of the once-mighty prairie job machine.

Ades says weak oil will help keep a lid on jobs growth for the next little while, although some of the damage should be offset by a weaker Canadian dollar, which should give a boost to the manufacturers that drive the economic bus in Ontario and Quebec.

“Manufacturing exports grew at a strong pace in 2014 and the good news is that this pace is expected to be maintained this year which should create some momentum hiring,” she says. Of course, the Conference Board factors in an oil price of $55 a barrel for its calculation, so it’s still a moving target.

Looking farther out, the Conference Board expects jobs growth to rebound in a big way in 2017, responding to an oil price that should gradually rise over the next two years, sparking a wave of non-residential construction.

So things should start looking up, assuming we have the cooperation of a certain important commodity.