During February, 30,300 positions were created, handily beating the consensus estimate of 11,000 jobs added, Statistics Canada said Friday.
Darryl James/The Globe and Mail
The Canadian economy added more than 30,000 jobs during February as the labour market continues a run of strength that could be threatened by the coronavirus outbreak.
During the month, 30,300 positions were created, handily beating the consensus estimate of 11,000 jobs added, Statistics Canada said Friday in its Labour Force Survey. The unemployment rate ticked higher, to 5.6 per cent, but remains near historic lows.
The entirety of February’s gain was in full-time work from private-sector employers. Wholesale and retail trade (22,600 jobs created) and manufacturing (16,000) were standout sectors, while Quebec added the largest number of jobs (20,000) by province and saw its jobless rate tumble to 4.5 per cent, the lowest since comparable data became available in 1976.
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Strong hiring and wage growth “are encouraging, but the real test will come in the next few months as the effects of the coronavirus outbreak are felt,” said Stephen Brown, senior Canada economist at Capital Economics, in a research note.
Statscan’s survey was conducted between Feb. 9 and 15. Since then, COVID-19 has spread to more countries, and the number of confirmed cases in Canada has risen. Virus fears have roiled markets, disrupted business operations and forced central banks – including the Bank of Canada – to cut interest rates to support a vulnerable economy.
Bank of Canada Governor Stephen Poloz warned of labour disruptions on Thursday. In a speech, he said the economy’s resilience could be “seriously tested” by the COVID-19 outbreak.
“Consumer and business confidence could be set back for a longer period of time, causing economic growth to slow more persistently,” Mr. Poloz said. “This could include longer-term layoffs, for example. At this point, we simply do not know.”
Scores of companies have responded to COVID-19 by getting some or all of their employees to work from home. In February, there were 110 transcripts from public companies that mentioned remote work, according to financial data platform Sentieo. Prior to then, a typical month would see three conference calls mention such arrangements.
Canadian companies including SNC-Lavalin Inc., WSP Global Inc. and Stantec Inc. have all asked some employees to work from home, transcripts show.
But for many industries, remote work is not an option. Canada’s tourism sector, for instance, is set for a rude awakening this year as travellers stay home and conferences get cancelled. Chinese tourist spending in Canada could plunge by one-third this year, resulting in a $550-million hit to the economy, the Conference Board of Canada estimates.
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Mr. Poloz also pointed to weaker commodity prices and their ability to transfer “international shocks to the Canadian economy.” Oil prices have tumbled this year due to weaker demand, and a prolonged slump could weigh on company investments and hiring plans.
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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.
