The Canadian economy recorded its first monthly loss of jobs since start of the year in June, but the labour market continued to be exceptionally tight as the unemployment rate fell again and wages moved higher.
In its labour force survey released Friday, Statistics Canada said the country lost 43,000 jobs last month, but the unemployment rate fell to 4.9 per cent, the lowest level since comparable data started in 1976, and compared with 5.1 per cent in May.
The decline in the unemployment rate in June was attributed to fewer people looking for work, Statistics Canada said, while the loss in jobs was driven by a decline in self-employment by 59,000 jobs.
Lack of workers
For business owners, the drop in the labour force participation rate added to their labour shortage woes.
Mark Kitching, owner of Waldo’s on King bistro and wine bar in London, Ont., said he could hire two or three additional kitchen staff, but isn’t getting applicants.
“I talked to people in my industry and we’re all having the same problem,” Kitching said.
The vacancies at Waldo’s mean staff have to work overtime hours, which Kitching says makes it more expensive and stressful to operate.
Bank of Montreal senior economist Robert Kavcic said the job market still looks very strong after assessing some of the monthly noise.
June also saw a faster pace of wage growth, with average hourly wages rising 5.2 per cent year over year to $31.24.
Kavcic said previous wage growth numbers were lagging and didn’t capture “reality on the ground.”
“These numbers are now better reflecting conditions in the real economy,” he said.
In comparison to wage growth prior to the pandemic, June recorded the fastest growth since the collection of comparable data in 1998. However, the rise in wages in June was still below the most recent inflation rate of 7.7 per cent reported in May.
Higher wages
McGill University economics professor Fabian Lange said wages need to keep up with inflation to attract workers as businesses continue to struggle with hiring.
“Wage growth is going to be necessary, given how tight the labour market is,” Lange said.
“If wages don’t go up, then you’re essentially shifting income from the labour market to the firms that are selling products at higher prices.”
Wage growth was led by gains among non-unionized workers, who saw their wages go up by 6.1 per cent, while unionized workers experienced a slower rise in wages of 3.7 per cent.
Higher interest rates coming
The jobs report comes ahead of the Bank of Canada’s interest rate announcement and monetary policy report next week.
The central bank is expected to raise its key interest rate on Wednesday, with most economists predicting a hike of three-quarters of a percentage point.
A recent study from the Canadian Centre for Policy Alternatives warned rapidly increasing interest rates will likely send the Canadian economy into a recession and could cause significant “collateral damage,” including 850,000 job losses.
For now, though, CIBC chief economist Avery Shenfeld said the Bank of Canada wouldn’t be dissuaded from raising interest rates more aggressively, noting an increase of 1.3 per cent in hours worked and the decline in jobs being offset by lower labour force participation.
“On its own, the headline jobs decline isn’t yet convincing evidence of a slowdown that will deter the Bank of Canada from a 75 basis point hike next week,” Shenfeld said in an email.
Jobs in the services-producing sector declined by 76,000, erasing gains made earlier in the year. The largest decline in employment was in retail trade. The report said data over the next few months may help answer whether the decline was due to consumer behaviours changing as inflation remains high.
TOKYO (AP) — Japanese technology group SoftBank swung back to profitability in the July-September quarter, boosted by positive results in its Vision Fund investments.
Tokyo-based SoftBank Group Corp. reported Tuesday a fiscal second quarter profit of nearly 1.18 trillion yen ($7.7 billion), compared with a 931 billion yen loss in the year-earlier period.
Quarterly sales edged up about 6% to nearly 1.77 trillion yen ($11.5 billion).
SoftBank credited income from royalties and licensing related to its holdings in Arm, a computer chip-designing company, whose business spans smartphones, data centers, networking equipment, automotive, consumer electronic devices, and AI applications.
The results were also helped by the absence of losses related to SoftBank’s investment in office-space sharing venture WeWork, which hit the previous fiscal year.
WeWork, which filed for Chapter 11 bankruptcy protection in 2023, emerged from Chapter 11 in June.
SoftBank has benefitted in recent months from rising share prices in some investment, such as U.S.-based e-commerce company Coupang, Chinese mobility provider DiDi Global and Bytedance, the Chinese developer of TikTok.
SoftBank’s financial results tend to swing wildly, partly because of its sprawling investment portfolio that includes search engine Yahoo, Chinese retailer Alibaba, and artificial intelligence company Nvidia.
SoftBank makes investments in a variety of companies that it groups together in a series of Vision Funds.
The company’s founder, Masayoshi Son, is a pioneer in technology investment in Japan. SoftBank Group does not give earnings forecasts.
Shopify Inc. executives brushed off concerns that incoming U.S. President Donald Trump will be a major detriment to many of the company’s merchants.
“There’s nothing in what we’ve heard from Trump, nor would there have been anything from (Democratic candidate) Kamala (Harris), which we think impacts the overall state of new business formation and entrepreneurship,” Shopify’s chief financial officer Jeff Hoffmeister told analysts on a call Tuesday.
“We still feel really good about all the merchants out there, all the entrepreneurs that want to start new businesses and that’s obviously not going to change with the administration.”
Hoffmeister’s comments come a week after Trump, a Republican businessman, trounced Harris in an election that will soon return him to the Oval Office.
On the campaign trail, he threatened to impose tariffs of 60 per cent on imports from China and roughly 10 per cent to 20 per cent on goods from all other countries.
If the president-elect makes good on the promise, many worry the cost of operating will soar for companies, including customers of Shopify, which sells e-commerce software to small businesses but also brands as big as Kylie Cosmetics and Victoria’s Secret.
These merchants may feel they have no choice but to pass on the increases to customers, perhaps sparking more inflation.
If Trump’s tariffs do come to fruition, Shopify’s president Harley Finkelstein pointed out China is “not a huge area” for Shopify.
However, “we can’t anticipate what every presidential administration is going to do,” he cautioned.
He likened the uncertainty facing the business community to the COVID-19 pandemic where Shopify had to help companies migrate online.
“Our job is no matter what comes the way of our merchants, we provide them with tools and service and support for them to navigate it really well,” he said.
Finkelstein was questioned about the forthcoming U.S. leadership change on a call meant to delve into Shopify’s latest earnings, which sent shares soaring 27 per cent to $158.63 shortly after Tuesday’s market open.
The Ottawa-based company, which keeps its books in U.S. dollars, reported US$828 million in net income for its third quarter, up from US$718 million in the same quarter last year, as its revenue rose 26 per cent.
Revenue for the period ended Sept. 30 totalled US$2.16 billion, up from US$1.71 billion a year earlier.
Subscription solutions revenue reached US$610 million, up from US$486 million in the same quarter last year.
Merchant solutions revenue amounted to US$1.55 billion, up from US$1.23 billion.
Shopify’s net income excluding the impact of equity investments totalled US$344 million for the quarter, up from US$173 million in the same quarter last year.
Daniel Chan, a TD Cowen analyst, said the results show Shopify has a leadership position in the e-commerce world and “a continued ability to gain market share.”
In its outlook for its fourth quarter of 2024, the company said it expects revenue to grow at a mid-to-high-twenties percentage rate on a year-over-year basis.
“Q4 guidance suggests Shopify will finish the year strong, with better-than-expected revenue growth and operating margin,” Chan pointed out in a note to investors.
This report by The Canadian Press was first published Nov. 12, 2024.
TORONTO – RioCan Real Estate Investment Trust says it has cut almost 10 per cent of its staff as it deals with a slowdown in the condo market and overall pushes for greater efficiency.
The company says the cuts, which amount to around 60 employees based on its last annual filing, will mean about $9 million in restructuring charges and should translate to about $8 million in annualized cash savings.
The job cuts come as RioCan and others scale back condo development plans as the market softens, but chief executive Jonathan Gitlin says the reductions were from a companywide efficiency effort.
RioCan says it doesn’t plan to start any new construction of mixed-use properties this year and well into 2025 as it adjusts to the shifting market demand.
The company reported a net income of $96.9 million in the third quarter, up from a loss of $73.5 million last year, as it saw a $159 million boost from a favourable change in the fair value of investment properties.
RioCan reported what it says is a record-breaking 97.8 per cent occupancy rate in the quarter including retail committed occupancy of 98.6 per cent.
This report by The Canadian Press was first published Nov. 12, 2024.
