The Canadian labour market is showing some signs of softening as the unemployment rate rises and wage growth slows, but with another solid job gain in June, forecasters are still expecting an interest rate hike by the Bank of Canada next week.
Statistics Canada reported Friday the economy added 60,000 jobs in June, driven by gains in full-time work.
But as more Canadians searched for work and the population continued to grow, the unemployment rate climbed higher to 5.4 per cent, the highest it’s been in more than a year.
“The reason the unemployment rate can rise alongside historically strong employment growth is that population growth continues to set new records — including an 84k monthly increase in June,” wrote RBC assistant chief economist Nathan Janzen in a note to clients.
June marked the second month in a row the unemployment rate has risen as economists watch for softening in the labour market amid high interest rates.
At the same time, employers’ hiring appetite bounced back in June after the economy lost 17,000 jobs in May.
“Overall, the job growth that we saw this month puts this report on the positive side, just not anything that we should get excited about,” said Brendon Bernard, a senior economist at hiring website Indeed.
Job gains were concentrated in wholesale and retail trade, manufacturing, health care and social assistance and transportation and warehousing.
Though signs of loosening in the labour market likely come as good news to the Bank of Canada, forecasters are still expecting the central bank to raise rates at its next interest rate decision on Wednesday.
“The June labour market data was mixed but shouldn’t be enough to prevent the Bank of Canada from following through with a second straight 25 basis point interest rate hike at the next policy decision next week,” Janzen wrote.
The central bank opted to end its pause on rate hikes in June after a string of economic data suggested its aggressive interest rate hikes weren’t cooling the economy fast enough. The quarter percentage point rate hike brought its key rate to 4.75 per cent, the highest it’s been since 2001.
Although central banks often give financial markets an indication of where they may take interest rates, the Bank of Canada has said little about its plans. Instead, it signalled after the June rate hike that the following decision would be taken based on incoming economic data.
What’s clear, though, is the Bank of Canada has kept a close eye on the labour market for signs of overheating in the economy. The central bank has repeatedly said that the country’s hot labour market is contributing to high inflation, raising concerns about the pace of wage growth in particular and whether it could prop up inflation over the longer term.
However, Statistics Canada said wage growth also softened last month, rising 4.2 per cent from a year ago. That’s compared with a year-over-year gain of 5.1 per cent in May.
Workers’ wages are rising faster than inflation, which was 3.4 per cent in May. But Bernard said the slowdown in wage growth may mean it will take longer for workers to make up for their lost purchasing power during this inflationary period.
Bernard said lower inflation in recent months may actually be helping cool wage growth. The labour economist said employers may be using the lower rates of inflation as a justification for lower pay raises in negotiations with job seekers and employees.
“Now that overall prices at least have shown signs of slowing, maybe some employers will take that to the bargaining table when they’re negotiating with job seekers or their existing employees,” Bernard said.
Another sign the labour market may be losing its steam comes from a weaker summer job season for students. Statistics Canada noted fewer students are working this summer, particularly among young women.
“I think that’s something to watch, and a potential sign that while the overall labour market has done pretty well … employers don’t have as many job openings and aren’t recruiting quite as intensely.”
This report by The Canadian Press was first published July 7, 2023.
CALGARY – TC Energy Corp. has lowered the estimated cost of its Southeast Gateway pipeline project in Mexico.
It says it now expects the project to cost between US$3.9 billion and US$4.1 billion compared with its original estimate of US$4.5 billion.
The change came as the company reported a third-quarter profit attributable to common shareholders of C$1.46 billion or $1.40 per share compared with a loss of C$197 million or 19 cents per share in the same quarter last year.
Revenue for the quarter ended Sept. 30 totalled C$4.08 billion, up from C$3.94 billion in the third quarter of 2023.
TC Energy says its comparable earnings for its latest quarter amounted to C$1.03 per share compared with C$1.00 per share a year earlier.
The average analyst estimate had been for a profit of 95 cents per share, according to LSEG Data & Analytics.
This report by The Canadian Press was first published Nov. 7, 2024.
BCE Inc. reported a loss in its latest quarter as it recorded $2.11 billion in asset impairment charges, mainly related to Bell Media’s TV and radio properties.
The company says its net loss attributable to common shareholders amounted to $1.24 billion or $1.36 per share for the quarter ended Sept. 30 compared with a profit of $640 million or 70 cents per share a year earlier.
On an adjusted basis, BCE says it earned 75 cents per share in its latest quarter compared with an adjusted profit of 81 cents per share in the same quarter last year.
“Bell’s results for the third quarter demonstrate that we are disciplined in our pursuit of profitable growth in an intensely competitive environment,” BCE chief executive Mirko Bibic said in a statement.
“Our focus this quarter, and throughout 2024, has been to attract higher-margin subscribers and reduce costs to help offset short-term revenue impacts from sustained competitive pricing pressures, slow economic growth and a media advertising market that is in transition.”
Operating revenue for the quarter totalled $5.97 billion, down from $6.08 billion in its third quarter of 2023.
BCE also said it now expects its revenue for 2024 to fall about 1.5 per cent compared with earlier guidance for an increase of zero to four per cent.
The company says the change comes as it faces lower-than-anticipated wireless product revenue and sustained pressure on wireless prices.
BCE added 33,111 net postpaid mobile phone subscribers, down 76.8 per cent from the same period last year, which was the company’s second-best performance on the metric since 2010.
It says the drop was driven by higher customer churn — a measure of subscribers who cancelled their service — amid greater competitive activity and promotional offer intensity. BCE’s monthly churn rate for the category was 1.28 per cent, up from 1.1 per cent during its previous third quarter.
The company also saw 11.6 per cent fewer gross subscriber activations “due to more targeted promotional offers and mobile device discounting compared to last year.”
Bell’s wireless mobile phone average revenue per user was $58.26, down 3.4 per cent from $60.28 in the third quarter of the prior year.
This report by The Canadian Press was first published Nov. 7, 2024.
TORONTO – Canada Goose Holdings Inc. trimmed its financial guidance as it reported its second-quarter revenue fell compared with a year ago.
The luxury clothing company says revenue for the quarter ended Sept. 29 totalled $267.8 million, down from $281.1 million in the same quarter last year.
Net income attributable to shareholders amounted to $5.4 million or six cents per diluted share, up from $3.9 million or four cents per diluted share a year earlier.
On an adjusted basis, Canada Goose says it earned five cents per diluted share in its latest quarter compared with an adjusted profit of 16 cents per diluted share a year earlier.
In its outlook, Canada Goose says it now expects total revenue for its full financial year to show a low-single-digit percentage decrease to low-single-digit percentage increase compared with earlier guidance for a low-single-digit increase.
It also says it now expects its adjusted net income per diluted share to show a mid-single-digit percentage increase compared with earlier guidance for a percentage increase in the mid-teens.
This report by The Canadian Press was first published Nov. 7, 2024.
