Unlikely to move the bar on Bank of Canada rate cut, say economists
Canada’s economy gained 41,000 jobs in February, but the unemployment rate ticked up to 5.8 per cent, Statistics Canada reported Friday.
The job gains more than doubled expectations of economists surveyed by Bloomberg. Employment growth, however, continued to lag population growth, with the employment rate falling by 0.1 percentage points to 61.5 per cent.
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The employment rate has now decreased for five months in a row, the longest losing run since 2009.
“This downward trend is associated with rapid population growth, which has outpaced employment growth in the past year,” Statistics Canada said.
The data show Canada’s economy grew in early 2024, but not fast enough to keep up with the rising population, Royal Bank of Canada’s assistant chief economist Nathan Janzen said in a note, adding that this is why the unemployment rate edged higher.
Average hourly wage growth eased to five per cent from 5.3 per cent in January, which could help cool core inflation later this year, Dominique Lapointe, director of macro strategy for Manulife Investment Management, said.
Job gains, which were driven by full-time employment, were spread across several industries in the services-producing sector.
“Today’s report is certainly impressive at first blush, particularly the towering rise in full-time jobs,” BMO chief economist Douglas Porter said in note. “However, it’s staggeringly clear that the results are flattered by ongoing massive population gains, and the labour market is thus actually gradually cooling.”
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Job gains were driven by a rise in self-employed positions, up 38,300, the first monthly increase since August 2023. Despite self-employment accounting for most of the full-time job gains, the category remains weak, said Statistics Canada.
The Bank of Canada, which held its benchmark interest rate at five per cent this week, will be watching the data to gauge inflation risks, but economists said these numbers aren’t likely to move the bar.
“The Canadian labour market continues to loosen, albeit at a snail’s pace that isn’t going to speed up the timeline for Bank of Canada interest rate cuts,” CIBC Capital Markets economist Andrew Grantham said in a note on the data.
The 0.1 percentage point rise in the unemployment rate merely reversed a surprise decline in the rate the month before. This rate has held relatively steady, sitting at 5.8 per cent for three of the past four months.
And though wage growth eased, it remains higher than the central bank would likely want to see, Grantham said.
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Much of the increase in unemployment has come from longer job searches for new labour market entrants, such as students, but the number of permanent layoffs is also up 32 per cent from a year ago in February, RBC’s Janzen said.
He said the unemployment rate is still expected to edge higher in the first half of this year as the economy slows further.
“We continue to expect the combination of a softening economic backdrop and slowing inflation pressures will allow the BoC to pivot to gradual interest rate cuts starting in June,” Janzen said.
• Email: dpaglinawan@postmedia.com
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Human Resources Officers must be very busy these days what with the general turnover of employees in our retail and business sectors. It is hard enough to find skilled people let alone potential employees willing to be trained. Then after the training, a few weeks go by then they come to you and ask for a raise. You refuse as there simply is no excess money in the budget and away they fly to wherever they come from, trained but not willing to put in the time to achieve that wanted raise.
I have had potentials come in and we give them a test to see if they do indeed know how to weld, polish or work with wood. 2-10 we hire, and one of those is gone in a week or two. Ask that they want overtime, and their laughter leaving the building is loud and unsettling. Housing starts are doing well but way behind because those trades needed to finish a project simply don’t come to the site, with delay after delay. Some people’s attitudes are just too funny. A recent graduate from a Ivy League university came in for an interview. The position was mid-management potential, but when we told them a three month period was needed and then they would make the big bucks they disappeared as fast as they arrived.
Government agencies are really no help, sending us people unsuited or unwilling to carry out the jobs we offer. Handing money over to staffing firms whose referrals are weak and ineffectual. Perhaps with the Fall and Winter upon us, these folks will have to find work and stop playing on the golf course or cottaging away. Tried to hire new arrivals in Canada but it is truly difficult to find someone who has a real identity card and is approved to live and work here. Who do we hire? Several years ago my father’s firm was rocking and rolling with all sorts of work. It was a summer day when the immigration officers arrived and 30+ employees hit the bricks almost immediately. The investigation that followed had threats of fines thrown at us by the officials. Good thing we kept excellent records, photos and digital copies. We had to prove the illegal documents given to us were as good as the real McCoy.
Restauranteurs, builders, manufacturers, finishers, trades-based firms, and warehousing are all suspect in hiring illegals, yet that becomes secondary as Toronto increases its minimum wage again bringing our payroll up another $120,000. Survival in Canada’s financial and business sectors is questionable for many. Good luck Chuck!. at least your carbon tax refund check should be arriving soon.
Steven Kaszab
Bradford, Ontario
skaszab@yahoo.ca
NORMAN WELLS, N.W.T. – Imperial Oil says it will temporarily reduce its fuel prices in a Northwest Territories community that has seen costs skyrocket due to low water on the Mackenzie River forcing the cancellation of the summer barge resupply season.
Imperial says in a Facebook post it will cut the air transportation portion that’s included in its wholesale price in Norman Wells for diesel fuel, or heating oil, from $3.38 per litre to $1.69 per litre, starting Tuesday.
The air transportation increase, it further states, will be implemented over a longer period.
It says Imperial is closely monitoring how much fuel needs to be airlifted to the Norman Wells area to prevent runouts until the winter road season begins and supplies can be replenished.
Gasoline and heating fuel prices approached $5 a litre at the start of this month.
Norman Wells’ town council declared a local emergency on humanitarian grounds last week as some of its 700 residents said they were facing monthly fuel bills coming to more than $5,000.
“The wholesale price increase that Imperial has applied is strictly to cover the air transportation costs. There is no Imperial profit margin included on the wholesale price. Imperial does not set prices at the retail level,” Imperial’s statement on Monday said.
The statement further said Imperial is working closely with the Northwest Territories government on ways to help residents in the near term.
“Imperial Oil’s decision to lower the price of home heating fuel offers immediate relief to residents facing financial pressures. This step reflects a swift response by Imperial Oil to discussions with the GNWT and will help ease short-term financial burdens on residents,” Caroline Wawzonek, Deputy Premier and Minister of Finance and Infrastructure, said in a news release Monday.
Wawzonek also noted the Territories government has supported the community with implementation of a fund supporting businesses and communities impacted by barge cancellations. She said there have also been increases to the Senior Home Heating Subsidy in Norman Wells, and continued support for heating costs for eligible Income Assistance recipients.
Additionally, she said the government has donated $150,000 to the Norman Wells food bank.
In its declaration of a state of emergency, the town said the mayor and council recognized the recent hike in fuel prices has strained household budgets, raised transportation costs, and affected local businesses.
It added that for the next three months, water and sewer service fees will be waived for all residents and businesses.
This report by The Canadian Press was first published Oct. 21, 2024.
The Canadian Press. All rights reserved.
TORONTO – A new report says many Canadian business leaders are worried about economic uncertainties related to the looming U.S. election.
The survey by KPMG in Canada of 735 small- and medium-sized businesses says 87 per cent fear the Canadian economy could become “collateral damage” from American protectionist policies that lead to less favourable trade deals and increased tariffs
It says that due to those concerns, 85 per cent of business leaders in Canada polled are reviewing their business strategies to prepare for a change in leadership.
The concerns are primarily being felt by larger Canadian companies and sectors that are highly integrated with the U.S. economy, such as manufacturing, automotive, transportation and warehousing, energy and natural resources, as well as technology, media and telecommunications.
Shaira Nanji, a KPMG Law partner in its tax practice, says the prospect of further changes to economic and trade policies in the U.S. means some Canadian firms will need to look for ways to mitigate added costs and take advantage of potential trade relief provisions to remain competitive.
Both presidential candidates have campaigned on protectionist policies that could cause uncertainty for Canadian trade, and whoever takes the White House will be in charge during the review of the United States-Mexico-Canada Agreement in 2026.
This report by The Canadian Press was first published Oct. 22, 2024.
The Canadian Press. All rights reserved.
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