Everyone Reports the Unemployment Rate. Almost Nobody Reads the Four Numbers Underneath It.
Let me climb up on my soapbox for a minute.
Every month the job numbers drop, and every month the same thing happens. The Globe and Mail, the Financial Post, the CBC… every headline leads with the unemployment rate.
The unemployment rate is a lazy metric. It’s the easy metric. It’s the one everybody reports because it fits in a headline.
Here’s the problem… judging a market by its unemployment rate is like judging a property by its curb appeal. Fresh paint, tidy lawn, looks great from the street. Then the inspection finds the crack in the foundation. The headline number is the paint job. Investors get paid for reading the inspection report.
The May Labour Force Survey just landed, and the headline story and the real story are not the same thing. So let’s read the inspection report together. National, then provincial, then right down to the Edmonton region.
One Good Month Is Not a Trend
Read the headlines and May looks bright and rosy. Jobs beat the forecast. Everybody proclaimed the recession over.
Slow down. May was the first month of positive employment gains in roughly five months. Three of the last four quarters were down. Year over year, GDP is down. And to be brutally honest, I believe Canada has been limping along for the past decade… significantly underperforming. (I broke the full GDP story down in Chapter 1 of this series.)
Don’t let a one-month blip write the whole story. And don’t let the national number write your market’s story either. Not every market is the same. That’s where the four fundamentals come in.
Fundamental 1: Absorption
Alberta added roughly 104,000 jobs over the year. A 4.1% growth rate, the strongest year-over-year employment gains of any province in the country. Alberta out-built every province, ahead of Ontario, with a third of the population.
Picture a city of 104,000 people. That entire city got a job this year.
Now, here’s what everybody in Alberta says next: “Yeah, the lineup at Tim Hortons is longer, I can’t find a parking spot, and everybody’s moving here just to be unemployed.”
The data says the opposite.
104,000 jobs against roughly 93,000 new residents. A 1.12 absorption rate. Alberta is absorbing workers into the workforce faster than the population is growing. The national ratio? About six in ten new residents absorbed.
That ratio is the difference between population growth that strains a market and population growth that strengthens it.
Fundamental 2: Caliber
A job count without a quality check is just a headcount.
Alberta gained 118,000 full time positions while part time employment fell. That’s not churn. That’s employers committing to permanent payroll… hours, benefits, stability.
Full time paycheques sign 12-month leases. Part time paycheques shop month to month. Same job count, completely different tenant.
Fundamental 3: Wages
Alberta leads the country in weekly earnings at $1,371, up almost 2% year over year.
Now the honest read, because I’m not here to cheerlead. That wage growth did not keep pace with the national rate. But remember what you’re measuring: a percentage on the highest base in the country. The biggest number needs the biggest jump just to match everyone else’s rate. The level supports today’s rents. The growth rate is what I’m watching for tomorrow’s… and you should be too.
And let me say this plainly. If Ontario were the right place to invest, that’s where I’d be pointing people. It isn’t right now. I follow the data, not the flag. There is one clear outlier among Canadian provinces, and it’s an outlier in a good way.
Fundamental 4: Diversification
The biggest knock against Alberta: “It’s a one trick pony. It’s all oil and gas.”
Read this part slowly. Alberta is energy led. It is not energy only.
Oil and gas drives about 21% of Alberta’s GDP. It employs about 6% of the workforce. Energy drives the royalties and the high wages. People work everywhere else.
Want proof? Look at where the growth actually came from: health care and social services, public administration, transportation and warehousing, manufacturing. Over 107,000 service jobs created… while natural resources employment actually shrank. The one trick pony narrative doesn’t survive contact with the data.
Drive down into Edmonton and it gets better. Health care, construction, and retail alone cover roughly 40% of the jobs in the city. Add government, education, and logistics, and you have one of the most diverse tenant bases in the country.
Why does a landlord care? Tenant profiles. Government and public administration payrolls are about as recession resistant as it gets. Teachers and administrators are excellent long-term tenants. Trades earn high wages. Every sector is a different tenant profile with different housing needs, and more profiles means more selection and more stability.
A diverse job base isn’t an economics talking point. It’s vacancy insurance.
Still On The Books
One more number, and this one is about the future.
Roughly 90,000 new jobs are forecast for the Alberta Industrial Heartland, just outside Edmonton. A few projects are underway. The majority are still on the books. The paycheques haven’t arrived yet.
90,000 future paycheques, concentrated in one small region. Who do you want them renting from?
I sure as heck want them renting from me.
The Catch
Now the part that keeps this from being a pep rally.
Not every property in Edmonton makes sense. Read that again.
You can have the GDP, the population, and the employment all pointing the right way and still buy a bad deal. Research, on its own, leads to nothing. It’s what you do with it. The research earns permission to look. The deal still has to survive underwriting.
Here’s the whole framework in one breath: population creates demand. Employment creates capacity. Full time work signals quality. Wages create affordability. Diversification creates durability. And underwriting turns your research into a deal.
Do This Tonight
Pick the market you’re underwriting and run it through the fundamentals. One evening, five steps:
- Pull the latest Labour Force Survey data for your market. Not the headline. The tables underneath.
- Run the absorption math: jobs added divided by population added. Above 1.0, the market is absorbing. Below it, the market is straining.
- Check the full time versus part time split. Caliber before count.
- List the top three employment sectors and match them against your actual tenant profile.
- Then, and only then, underwrite the property.
Simple… but not easy. And you’re more than capable of this work. The investors who do it aren’t smarter than you. They just stopped reading headlines.
The unemployment rate will be on the front page again next month. Let everyone else read it. You read the fundamentals underneath.
This Is Chapter Three
This is Chapter 3 of the 12-part research series. Chapter 1 covered the GDP story behind the recession headlines. Chapter 2 followed the population wave. This one follows the paycheques. Watch the full breakdown, national to provincial to Edmonton, right here:
And make sure you’re subscribed to the channel so you don’t miss the next chapter.
Not Sure What Your Next Step Is?
I’ve leaned on more people in my investing career than I can count… stood on the shoulders of giants. So if you’re scaling and you want a second pair of eyes on your market research, let’s talk. A private, judgment-free conversation about exactly where you’re at.
Stop reading headlines. Start reading fundamentals. And make your decisions on facts, not front pages.
I believe in you. Now go do the homework.
In your corner,
Russell Westcott
#Inspire # Encourage #Love
