The Canadian economy added 419,000 jobs in July as pandemic restrictions eased across the country, marking the third consecutive month of rising employment.
The results were more subdued than June’s gain of 953,000 positions, but were also accompanied by a reduction in the unemployment rate, to 10.9 per cent from 12.3 per cent, Statistics Canada reported Friday. The labour market has now recovered about 55 per cent of three million jobs that were lost between February and April as COVID-19 forced stringent lockdowns across the country and widespread closures of non-essential businesses.
Most of July’s growth was in part-time work (345,000), which had suffered significantly worse losses in March and April than full-time work, given its prevalence in hard-hit industries such as retail trade, tourism and restaurants.
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The number of Canadians who were employed but worked less than half their usual hours because of the virus has declined by 412,000 to just under one million. Combined with job losses, the total number of affected workers is about 2.3 million, sharply improved from 5.5 million at the depths of the crisis in April.
“The pace of increase in employment slowed in July relative to the prior month, and that’s likely to become a trend as the pace of easing in restrictions also slows down and the number of Canadians on temporary layoff falls,” said Royce Mendes, senior economist at Canadian Imperial Bank of Commerce, in a client note.
“The good news is that with virus cases low in Canada at the moment, the country isn’t facing an immediate risk of having to tamp down activity again.”
Friday’s report was the first to ask respondents about visible minority status. The results pointed to a disproportionate impact on several groups. Unadjusted for seasonality, the jobless rate for those aged 15 to 69 was 11.3 per cent in July. The rate was substantially higher for South Asian (17.8 per cent), Arab (17.3 per cent) and Black (16.8 per cent) Canadians.
For those who are not a visible minority or Aboriginal – in essence, white people – the jobless rate was 9.3 per cent in July. Statscan said higher joblessness for visible minorities may be partly attributable to higher representation in hard-hit industries, such as food services.
July saw stronger gains in services employment (348,000) than in the goods-producing sector (71,000). Employment in both sectors now stands at roughly 93 per cent of prepandemic levels.
Ontario led the provinces with 151,000 positions added last month. Friday’s job report was the first to reflect a partial reopening of services in Toronto. Employment in the broader Toronto area increased by 68,400 in July.
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The pace of the recovery will be scrutinized as various government programs change or wind down. Eligibility for the Canada Emergency Response Benefit – which pays $2,000 every four weeks to workers deeply affected by the pandemic – ends in September, and many of those who have continuously been on CERB since mid-March have received their final payments.
In the coming weeks, some workers will move from CERB to Employment Insurance. The federal Liberal Party has said it’s eyeing looser criteria to access EI, but will otherwise create a separate “parallel benefit” to help gig and contract workers who don’t qualify. The self-employed, who numbered close to three million before the pandemic, are ineligible for regular EI benefits.
“If this is indeed a ‘checkmark’ or ‘swoosh’ recovery, expect these and other impressive near-term gains to give way to a much more gradual recovery path and one that will feel very different across industries,” said Brian DePratto, senior economist at Toronto-Dominion Bank, in a client note.
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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.
