54
THE ECONOMY
The Labour Market
After a year of relative tightening in 2000, the local labour market slackened distinctly in 2001. Consequential to more extensive corporate downsizing and lay-offs upon the economic downturn, labour demand moderated markedly over the course of the year, especially in the wake of the September 11 incidents. Yet labour supply continued to rise. The seasonally adjusted unemployment rate, having edged higher from 4.4 per cent in the fourth quarter of 2000 to 4.5 per cent in both the first and second quarters of 2001, surged to 5.3 per cent in the third quarter and further to 6.1 per cent in the fourth quarter. The total numbers unemployed (not seasonally adjusted) likewise leaped, from 149 600 in the fourth quarter of 2000 to 209 800 in the fourth quarter of 2001. Furthermore, the median duration of unemployment lengthened from 78 days to 82 days, while the proportion of persons unemployed for three months or more went up from 42 per cent to 45 per cent. The underemployment rate also rose appreciably, from 2.6 per cent in the fourth quarter of 2000 to 3.0 per cent in the fourth quarter of 2001, as did the total numbers underemployed, from 88 700 to 104 300. The increase again occurred predominantly in the latter part of the year, upon the impact of the terrorist attacks (Chart 10).
Chart 10
Unemployment and underemployment rates
Per cent
6.5
6.0
5.5
5.0
4.5
4.0
3.5
3.0
Seasonally adjusted unemployment rate
2.5
2.0
Underemployment rate
1.5
1.0
0.5
0
Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
1996
1997
1998
1999 I 2000
2001
The labour market slackened distinctly in the second half of 2001, as borne out by a significant rise in both the unemployment and underemployment rates.
For persons still in employment, work effort generally accentuated. The proportion of employed persons working for 50 hours or more per week went up further, from 34 per cent in the fourth quarter of 2000 to 35 per cent in the fourth quarter of 2001. For those working for 60 hours or more per week, the proportion showed a slightly larger rise, from 19 per cent to 21 per cent. The median hours of work stayed high during the year, mostly at 48 hours per week.