A now hiring sign outside a business in Somerville, Mass., on Sept. 1, 2022.BRIAN SNYDER/Reuters
U.S. job growth blew past expectations in March and wages increased at a steady clip, suggesting the economy ended the first quarter on solid ground and potentially delaying anticipated Federal Reserve interest rate cuts this year.
The Labor Department’s closely watched employment report on Friday also showed the unemployment rate fell to 3.8 per cent last month from 3.9 per cent in February. The decline in the jobless rate reflected a sharp rebound in household employment, which more than absorbed the 469,000 people who joined the labour force.
The unemployment rate has remained below 4 per cent for 26 straight months, the longest such stretch since the late 1960s. The U.S. economy is outshining its global peers even though the Fed has raised rates by 525 basis points since March 2022 to dampen inflation. The labour market is benefiting from a rise in immigration over the past year.
Though the strong hiring did not alter expectations that the U.S. central bank would start easing rates this year given increased labour supply, financial markets are doubtful of the three cuts envisaged by policy-makers.
“While the favourable supply-side developments are consistent with (Fed Chair Jerome) Powell’s benign view of the outlook, the apparent absence of any cracks developing on the demand side should lessen the urgency to ease policy, and we are pushing back our call for the first Fed cut from June to July,” said Michael Feroli, chief U.S. economist at JPMorgan in New York.
Nonfarm payrolls increased by 303,000 jobs last month, the Labor Department’s Bureau of Labor Statistics said. The economy added 22,000 more jobs than previously estimated in January and February. Economists polled by Reuters had forecast 200,000 new jobs in March, with estimates ranging from 150,000 to 250,000.
Job gains in the first quarter averaged 276,000 per month compared to the October-December quarter’s average of 212,000.
Economists say most businesses locked in lower borrowing costs prior to the U.S. central bank’s tightening cycle, providing some insulation from higher borrowing costs and allowing them to keep their workers.
Industries sensitive to interest rates, like construction, are also boosting hiring as financial conditions ease.
About 59.4 per cent of industries added jobs last month, further easing worries that employment was concentrated in too few sectors. The health care sector led the broad increase in employment, adding 72,000 jobs that were spread across ambulatory services, hospitals as well as nursing and residential care facilities.
Government payrolls increased by 71,000 jobs, boosted by local and federal government hiring.
The construction sector added 39,000 jobs, about double the average monthly gain of 19,000 over the last 12 months.
Leisure and hospitality payrolls rose 49,000, returning employment to its pre-pandemic level. There were also increases in employment in the social assistance, retail and wholesale trade sectors.
Financial activities reported modest gains in payrolls as did mining and logging, transportation and warehousing.
Professional and business services employment rose slightly, with temporary help – seen a as harbinger for future hiring – posting a small decline. But manufacturing added no jobs last month as did the information sector. Utilities shed 400 jobs.
Average hourly earnings rose 0.3 per cent in March after gaining 0.2 per cent in the prior month as some weather-related distortions faded. Wages increased 4.1 per cent on a year-on-year basis, the smallest gain since June 2021, after advancing 4.3 per cent in February.
Wage growth in a 3 per cent-3.5 per cent range is seen as consistent with the Fed’s 2 per cent inflation target.
Inflation data next week will be crucial in determining the timing of the first rate cut. The Fed has kept its policy rate at the current 5.25 per cent-5.50 per cent range since last July. Following the report, financial markets saw two rate cuts this year, according to LSEG data.
“While we … believe the Fed is likely to proceed with three rate cuts this year, reports like these may tilt some policy-makers toward expecting fewer rate cuts in 2024,” said Lydia Boussour, senior economist at EY-Parthenon in New York.
Dallas Federal Reserve President Lorie Logan said Friday that an inflation landscape increasingly beset by upside risks argues against any imminent push toward easier monetary policy.
“I believe it’s much too soon to think about cutting interest rates,” Logan said in remarks prepared for a speech at Duke University.
Before lowering rates, “I will need to see more of the uncertainty resolved about which economic path we’re on. And, as always the (Federal Open Market Committee) should remain prepared to respond appropriately if inflation stops falling,” she said.
Stocks on Wall Street were trading higher. The dollar rose against a basket of currencies. U.S. Treasury prices fell.
The average workweek rebounded to 34.4 hours last month, from 34.3 hours in February. That together with the strong payrolls boosted aggregate hours worked 0.5 per cent, consistent with expectations for solid economic growth in the first quarter.
Gross domestic product growth forecasts for the January-March quarter are as high as 2.5 per cent annualized rate. The economy grew at a 3.4 per cent pace in the fourth quarter.
The strong job gains seen in the establishment survey last month were mirrored in the smaller and volatile household survey, from which the jobless rate is derived. Household employment rebounded by 498,000 jobs after declining for three straight month.
The two surveys had diverged sharply in recent months. Economists attributed the divergence to an increase in labour supply through immigration that was not yet being captured in the household survey.
The Congressional Budget Office recently upgraded its immigration estimate for 2023 to 3.3 million from 1.0 million.
The BLS uses U.S. Census population estimates and will likely update the population flows in its annual benchmark revision next year.
Researchers at the Brookings Institution in Washington estimated the new CBO projections suggested the labour market in 2023 could accommodate employment growth of 160,000 to 230,000 per month, compared to previous projections of 60,000 to 130,000, without adding pressure to wages and price inflation.
The labour force participation rate, or the proportion of working-age Americans who have a job or are looking for one, rose to a four-month high of 62.7 per cent from 62.5 per cent in February.
The employment-to-population ratio, viewed as a measure of an economy’s ability to create employment, also climbed to a four-month high of 60.3 per cent from 60.1 per cent in February.
“Clearly, the job market has plenty of gas in the tank in terms of demand, and also has room to run in terms of worker supply,” said Nick Bunker, economic research director for North America at Indeed Hiring Lab in Tampa, Florida. “That’s a good thing for all of us.”
Almost seven years since news broke of an alleged conspiracy to fix the price of packaged bread across Canada, the saga isn’t over: the Competition Bureau continues to investigate the companies that may have been involved, and two class-action lawsuits continue to work their way through the courts.
Here’s a timeline of key events in the bread price-fixing case.
Oct. 31, 2017: The Competition Bureau says it’s investigating allegations of bread price-fixing and that it was granted search warrants in the case. Several grocers confirm they are co-operating in the probe.
Dec. 19, 2017: Loblaw and George Weston say they participated in an “industry-wide price-fixing arrangement” to raise the price of packaged bread. The companies say they have been co-operating in the Competition Bureau’s investigation since March 2015, when they self-reported to the bureau upon discovering anti-competitive behaviour, and are receiving immunity from prosecution. They announce they are offering $25 gift cards to customers amid the ongoing investigation into alleged bread price-fixing.
Jan. 31, 2018: In court documents, the Competition Bureau says at least $1.50 was added to the price of a loaf of bread between about 2001 and 2016.
Dec. 20, 2019: A class-action lawsuit in a Quebec court against multiple grocers and food companies is certified against a number of companies allegedly involved in bread price-fixing, including Loblaw, George Weston, Metro, Sobeys, Walmart Canada, Canada Bread and Giant Tiger (which have all denied involvement, except for Loblaw and George Weston, which later settled with the plaintiffs).
Dec. 31, 2021: A class-action lawsuit in an Ontario court covering all Canadian residents except those in Quebec who bought packaged bread from a company named in the suit is certified against roughly the same group of companies.
June 21, 2023: Bakery giant Canada Bread Co. is fined $50 million after pleading guilty to four counts of price-fixing under the Competition Act as part of the Competition Bureau’s ongoing investigation.
Oct. 25 2023: Canada Bread files a statement of defence in the Ontario class action denying participating in the alleged conspiracy and saying any anti-competitive behaviour it participated in was at the direction and to the benefit of its then-majority owner Maple Leaf Foods, which is not a defendant in the case (neither is its current owner Grupo Bimbo). Maple Leaf calls Canada Bread’s accusations “baseless.”
Dec. 20, 2023: Metro files new documents in the Ontario class action accusing Loblaw and its parent company George Weston of conspiring to implicate it in the alleged scheme, denying involvement. Sobeys has made a similar claim. The two companies deny the allegations.
July 25, 2024: Loblaw and George Weston say they agreed to pay a combined $500 million to settle both the Ontario and Quebec class-action lawsuits. Loblaw’s share of the settlement includes a $96-million credit for the gift cards it gave out years earlier.
Sept. 12, 2024: Canada Bread files new documents in Ontario court as part of the class action, claiming Maple Leaf used it as a “shield” to avoid liability in the alleged scheme. Maple Leaf was a majority shareholder of Canada Bread until 2014, and the company claims it’s liable for any price-fixing activity. Maple Leaf refutes the claims.
This report by The Canadian Press was first published Sept. 19, 2024.
Companies in this story: (TSX:L, TSX:MFI, TSX:MRU, TSX:EMP.A, TSX:WN)
TORONTO – Canada’s main stock index was up more than 250 points in late-morning trading, led by strength in the base metal and technology sectors, while U.S. stock markets also charged higher.
The S&P/TSX composite index was up 254.62 points at 23,847.22.
In New York, the Dow Jones industrial average was up 432.77 points at 41,935.87. The S&P 500 index was up 96.38 points at 5,714.64, while the Nasdaq composite was up 486.12 points at 18,059.42.
The Canadian dollar traded for 73.68 cents US compared with 73.58 cents US on Thursday.
The November crude oil contract was up 89 cents at US$70.77 per barrel and the October natural gas contract was down a penny at US2.27 per mmBTU.
The December gold contract was up US$9.40 at US$2,608.00 an ounce and the December copper contract was up four cents at US$4.33 a pound.
This report by The Canadian Press was first published Sept. 19, 2024.
VANCOUVER – Supervised injection sites are saving the lives of drug users everyday, but the same support is not being offered to people who inhale illicit drugs, the head of the BC Centre for Excellence in HIV/AIDS says.
Dr. Julio Montaner said the construction of Vancouver’s first indoor supervised site for people who inhale drugs comes as the percentage of people who die from smoking drugs continues to climb.
The location in the Downtown Eastside at the Hope to Health Research and Innovation Centre was unveiled Wednesday after construction was complete, and Montaner said people could start using the specialized rooms in a matter of weeks after final approvals from the city and federal government.
“If we don’t create mechanisms for these individuals to be able to use safely and engage with the medical system, and generate points of entry into the medical system, we will never be able to solve the problem,” he said.
“Now, I’m not here to tell you that we will fix it tomorrow, but denying it or ignoring it, or throw it under the bus, or under the carpet is no way to fix it, so we need to take proactive action.”
Nearly two-thirds of overdose deaths in British Columbia in 2023 came after smoking illicit drugs, yet only 40 per cent of supervised consumption sites in the province offer a safe place to smoke, often outdoors, in a tent.
The centre has been running a supervised injection site for years which sees more than a thousand people monthly and last month resuscitated five people who were overdosing.
The new facilities offer indoor, individual, negative-pressure rooms that allow fresh air to circulate and can clear out smoke in 30 to 60 seconds while users are monitored by trained nurses.
Advocates calling for more supervised inhalation sites have previously said the rules for setting up sites are overly complicated at a time when the province is facing an overdose crisis.
More than 15,000 people have died of overdoses since the public health emergency was declared in B.C. in April 2016.
Kate Salters, a senior researcher at the centre, said they worked with mechanical and chemical engineers to make sure the site is up to code and abidies by the highest standard of occupational health and safety.
“This is just another tool in our tool box to make sure that we’re offering life-saving services to those who are using drugs,” she said.
Montaner acknowledged the process to get the site up and running took “an inordinate amount of time,” but said the centre worked hard to follow all regulations.
“We feel that doing this right, with appropriate scientific background, in a medically supervised environment, etc, etc, allows us to derive the data that ultimately will be sufficiently convincing for not just our leaders, but also the leaders across the country and across the world, to embrace the strategies that we are trying to develop.” he said.
Montaner said building the facility was possible thanks to a single $4-million donation from a longtime supporter.
Construction finished with less than a week before the launch of the next provincial election campaign and within a year of the next federal election.
Montaner said he is concerned about “some of the things that have been said publicly by some of the political leaders in the province and in the country.”
“We want to bring awareness to the people that this is a serious undertaking. This is a very massive investment, and we need to protect it for the benefit of people who are unfortunately drug dependent.” he said.
This report by The Canadian Press was first published Sept. 18, 2024.
