The number of Prince Edward Islanders who either have jobs or are looking for one continued to fall in September.
Statistics Canada released the Labour Force Survey for September Friday morning.
Participation in the workforce crashed below 60 per cent on the Island in April, at the start of the pandemic, but had recovered to near pre-pandemic levels by June, when it rose to 66 per cent.
The participation rate has been falling since, however, dropping to 63.7 per cent in September.
Also in September, the number of jobs in the economy fell for the first time since April, down 800 to 75,500. With fewer people in the workforce, the unemployment rate also fell, down 0.6 percentage points to 10.1 per cent.
Atlantic Provinces Economic Council economist Patrick Brannon said the statistics should be viewed with caution.
P.E.I.'s small size can lead to volatility from month to month at the best of times, and Brannon said there have been extra challenges gathering data during the pandemic.
"I think there's a little bit of challenges with the Labour Force Survey data at the moment with small areas, including P.E.I.," he said.
"There has been challenges just to get participation in the Labour Force Survey. People have a lot on their minds and aren't responding to it at the same rate."
Brannon noted looking at the year-to-date, which eliminates some of the month-to-month volatility, shows employment on the Island is down just 2.4 per cent, the smallest decline in the country. Nationally employment is down six per cent.
Youth driving participation rate
The downward movement in the participation rate is being driven almost entirely by people aged 15 to 24.
Young people left the workforce in larger numbers in April and drove the increase in June, as well as the falling trend through the summer.
UPEI economist George Jia said some of that trend can be accounted for by the kinds of jobs young people often hold.
"Workers among this age group are more likely to be attached to the retail and hospitality sector, which are going through rough times," said Jia.
Another factor could be the Canada emergency response benefit.
Because P.E.I. has the lowest wages in Canada, the value of CERB compared to the value of taking a job is relatively high on the Island, said UPEI economist Jim Sentance.
Jia does not see CERB as a major factor. He noted the Labour Force Survey shows that there are not just fewer youth participating, there are fewer jobs for them.
There were 1,000 fewer jobs for youth in September, seasonally adjusted, and 900 of them were full time. Youth employment is down 20 per cent compared to last September.
While the economic fallout of the pandemic is still in the early months, Sentance said the particular difficulty youth are having points to a long-term problem for them that is common in recessions.
Youth trying to enter the workforce this year will have trouble finding a job. When the recession ends, there will be a new cohort of young people looking for work, and employers will likely look to them, rather than to this year's group, which will have been out of work for 12 to 18 months.
"That will be a reality for young people coming out of this. They probably will have a dampened future track," said Sentance.
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