Pedestrians walk along Yonge Street, in downtown Toronto, on Nov. 19, 2020.Fred Lum/The Globe and Mail
Canada’s streak of job growth continued in October, though it slowed from a torrid pace.
The country added 31,000 jobs last month, following a gain of 157,000 positions in September, Statistics Canada said Friday. The unemployment rate declined to 6.7 per cent from 6.9 per cent. It was the fifth consecutive month of job growth since the summer reopening.
As of October, around 19.16 million Canadians were employed – or nearly 32,000 more than in February, 2020, when the pandemic upended the economy.
Despite the threat of the Delta variant of COVID-19, hiring has continued to chug along in early fall. The October gain was entirely driven by the private sector, which saw an increase of 70,000 jobs. And the standout industry was retail, adding 72,000 positions for the month.
After wild bouts of layoffs and hiring in much of the past two years, Friday’s labour report resembled a “normal” one, said Bank of Montreal chief economist Doug Porter in a report to investors, pointing out that monthly job creation in 2019 averaged just under 30,000.
“Over all, a bit of a ho-hum report, which will make little impact on the timing of any rate moves by the Bank of Canada – but given the wildness of the prior 18 months, no one is complaining about ho-hum,” Mr. Porter said.
The question is whether that normality persists. Federal financial supports for employers and individuals – such as the Canada Emergency Wage Subsidy and Canada Recovery Benefit – expired on Oct. 23, which could have a ripple effect on hiring and labour participation.
At the same time, job openings are continuing to grow, and employers remain vocal about their struggles to fill vacancies. There has also been further easing of health restrictions, such as the removal of capacity limits on indoor dining in Ontario in late October.
“With COVID cases on the decline, and some provinces continuing to ease restrictions … employment should continue to advance, driven by industries with strong labour demand,” said Toronto-Dominion Bank senior economist Sri Thanabalasingam in a note to clients.
The labour market hit some milestones last month. Full-time employment for men in the core working ages of 25 to 54 returned to its prepandemic level. For women in that cohort, full-time work has increased by nearly 100,000 positions since the pandemic started.
While the labour participation rate fell 0.2 percentage points to 65.3 per cent in October, it has fully recovered and was at record or near-record highs for most age groups, Statscan noted.
Still, there are segments of the labour market that are struggling greatly. In particular, self-employment continued a lengthy slide, falling another 38,000 positions in October. Statscan noted that self-employment now stands at the lowest level seen since March of 2007.
Despite having a large number of vacancies, the hospitality industry lost workers for a second consecutive month, dropping by some 27,000 people in October. Restaurants and hotels have been some of the most vocal businesses about their hiring challenges. Hospitality jobs are down 17 per cent (207,000) since COVID-19 started.
While employment has returned to prepandemic levels, Canada is still short of a full recovery. The employment rate of 61 per cent is down 0.8 percentage points over the pandemic, reflecting growth of the adult population. To close the employment-rate gap, another 265,000 jobs are needed for a full recovery, based on today’s population.
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TORONTO – Canada’s main stock index was higher in late-morning trading, helped by strength in energy stocks, while U.S. stock markets also moved up.
The S&P/TSX composite index was up 34.91 points at 23,736.98.
In New York, the Dow Jones industrial average was up 178.05 points at 41,800.13. The S&P 500 index was up 28.38 points at 5,661.47, while the Nasdaq composite was up 133.17 points at 17,725.30.
The Canadian dollar traded for 73.56 cents US compared with 73.57 cents US on Monday.
The November crude oil contract was up 68 cents at US$69.70 per barrel and the October natural gas contract was up three cents at US$2.40 per mmBTU.
The December gold contract was down US$7.80 at US$2,601.10 an ounce and the December copper contract was up a penny at US$4.28 a pound.
This report by The Canadian Press was first published Sept. 17, 2024.
OTTAWA – Canada’s inflation rate fell to two per cent last month, finally hitting the Bank of Canada’s target after a tumultuous battle with skyrocketing price growth.
The annual inflation rate fell from 2.5 per cent in July to reach the lowest level since February 2021.
Statistics Canada’s consumer price index report on Tuesday attributed the slowdown in part to lower gasoline prices.
Clothing and footwear prices also decreased on a month-over-month basis, marking the first decline in the month of August since 1971 as retailers offered larger discounts to entice shoppers amid slowing demand.
The Bank of Canada’s preferred core measures of inflation, which strip out volatility in prices, also edged down in August.
The marked slowdown in price growth last month was steeper than the 2.1 per cent annual increase forecasters were expecting ahead of Tuesday’s release and will likely spark speculation of a larger interest rate cut next month from the Bank of Canada.
“Inflation remains unthreatening and the Bank of Canada should now focus on trying to stimulate the economy and halting the upward climb in the unemployment rate,” wrote CIBC senior economist Andrew Grantham.
Benjamin Reitzes, managing director of Canadian rates and macro strategist at BMO, said Tuesday’s figures “tilt the scales” slightly in favour of more aggressive cuts, though he noted the Bank of Canada will have one more inflation reading before its October rate announcement.
“If we get another big downside surprise, calls for a 50 basis-point cut will only grow louder,” wrote Reitzes in a client note.
The central bank began rapidly hiking interest rates in March 2022 in response to runaway inflation, which peaked at a whopping 8.1 per cent that summer.
The central bank increased its key lending rate to five per cent and held it at that level until June 2024, when it delivered its first rate cut in four years.
A combination of recovered global supply chains and high interest rates have helped cool price growth in Canada and around the world.
Bank of Canada governor Tiff Macklem recently signalled that the central bank is ready to increase the size of its interest rate cuts, if inflation or the economy slow by more than expected.
Its key lending rate currently stands at 4.25 per cent.
CIBC is forecasting the central bank will cut its key rate by two percentage points between now and the middle of next year.
The U.S. Federal Reserve is also expected on Wednesday to deliver its first interest rate cut in four years.
This report by The Canadian Press was first published Sept. 17, 2024.
FREDERICTON – New Brunswick‘s finance minister says the province recorded a surplus of $500.8 million for the fiscal year that ended in March.
Ernie Steeves says the amount — more than 10 times higher than the province’s original $40.3-million budget projection for the 2023-24 fiscal year — was largely the result of a strong economy and population growth.
The report of a big surplus comes as the province prepares for an election campaign, which will officially start on Thursday and end with a vote on Oct. 21.
Steeves says growth of the surplus was fed by revenue from the Harmonized Sales Tax and federal money, especially for health-care funding.
Progressive Conservative Premier Blaine Higgs has promised to reduce the HST by two percentage points to 13 per cent if the party is elected to govern next month.
Meanwhile, the province’s net debt, according to the audited consolidated financial statements, has dropped from $12.3 billion in 2022-23 to $11.8 billion in the most recent fiscal year.
Liberal critic René Legacy says having a stronger balance sheet does not eliminate issues in health care, housing and education.
This report by The Canadian Press was first published Sept. 16, 2024.
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