<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="The US economy regained fewer jobs in July after a record gain in June, as a resurgence of coronavirus cases in some states earlier this summer weighed on the labor market recovery. However, the number of jobs added topped estimates, and the unemployment rate fell more than expected.” data-reactid=”16″>The US economy regained fewer jobs in July after a record gain in June, as a resurgence of coronavirus cases in some states earlier this summer weighed on the labor market recovery. However, the number of jobs added topped estimates, and the unemployment rate fell more than expected.
<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="The Department of Labor’s July jobs report was released at 8:30 a.m. ET Friday. Here were the main metrics in the report, compared to consensus estimates compiled by Bloomberg:” data-reactid=”17″>The Department of Labor’s July jobs report was released at 8:30 a.m. ET Friday. Here were the main metrics in the report, compared to consensus estimates compiled by Bloomberg:
Change in non-farm payrolls: +1.783 million vs.+1.48 million expected and +4.791 million in June
Unemployment rate: 10.2% vs.10.6% expected and 11.1% in June
Average hourly earnings, month over month: +0.2% vs. -0.5% expected and -1.3% in June
Average hourly earnings, year over year: +4.8%vs.+4.2% expected and +4.9% in June
The change in total non-farm payrolls for June was revised down slightly by 9,000 to 4.791 million, while May’s payrolls were revised up by 26,000 to 2.725 million.
<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Contracts on the three major US stock indices pared overnight losses after the better-than-expected July print was released.” data-reactid=”24″>Contracts on the three major US stock indices pared overnight losses after the better-than-expected July print was released.
<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="July marked the third straight month that the economy added jobs on net. However, even with the past several months of gains, the economy has not made up the entirety of the lost jobs since the start of the pandemic – especially after April’s record drop of more than 20 million payrolls.” data-reactid=”25″>July marked the third straight month that the economy added jobs on net. However, even with the past several months of gains, the economy has not made up the entirety of the lost jobs since the start of the pandemic – especially after April’s record drop of more than 20 million payrolls.
In July, the number of unemployed individuals on temporary layoffs fell by 1.3 million to 9.2 million. That was half of April’s level, as Americans began returning to work following temporary virus-related business closures. However, the number of permanent job losers held steady in July over the prior month at 2.9 million, underscoring the longer-lasting impact to the labor market due to the pandemic.
The services sector again led non-farm payroll gains in July, after the services economy was cut deeply by shelter in place orders and business closures earlier on this year. The leisure and hospitality industry added back 592,000 jobs after gaining nearly 2 million in June, and retail trade jobs increased by 258,000 in July after a rise of more than 800,000 during the prior month.
Within services, information-related industries were the only group to shed jobs on net in July, losing 15,000. Within the goods-producing sector, mining and logging jobs fell by 7,000.
Government jobs rose by 301,000 in July, after an increase of 54,000 in June.
Elsewhere, the jobless rate improved by a greater than expected margin to 10.2% in July from 11.1% in June. However, the unemployment rate remained above the the Global Financial Crisis peak of 10.0%, and more than double the 3.5% rate from February before the spread of the pandemic in the U.S.
Average hourly wages unexpectedly rose on a month over month basis by 0.2%, following a revised 1.3% decline in June. Consensus economists had expected to see average hourly earnings moderate and decline 0.5% on a monthly basis, due to compositional effects as low-wage workers reentered the workforce following shutdowns.
The US economy added back 1.763 million non-farm payrolls in June and the unemployment rate edged lower to 10.2%. (David Foster/Yahoo Finance)
As had been the case since the start of the pandemic, the dispersion among estimates for July’s change in non-farm payrolls was elevated.
<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="On the high end, a handful of economists estimated that the economy added back at least 3 million jobs during the month, or double the median estimate. Several, however, expected that non-farm payrolls declined by several hundred thousand. US employers added back more jobs than expected in each of the three latest jobs reports.” data-reactid=”44″>On the high end, a handful of economists estimated that the economy added back at least 3 million jobs during the month, or double the median estimate. Several, however, expected that non-farm payrolls declined by several hundred thousand. US employers added back more jobs than expected in each of the three latest jobs reports.
Still, economists convened on the notion that the pace of recovery in the labor market decelerated since June, due to both the sunsetting of enhanced federal unemployment benefits and the reimposition of stay-in-place measures in some states.
“The 1.763 million increase in non-farm payrolls in July confirms that the resurgence in new virus cases caused the economic recovery to slow, but also underlines that it has not yet gone into reverse,” said Andrew Hunter, senior economist for Capital Economics. “With new infections now trending clearly lower again and high-frequency activity indicators showing tentative signs of a renewed upturn, employment should continue to rebound over the coming months.”
<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Ahead of the July jobs report, other recent data also reflected a braking recovery in the labor market. The reference week for the Labor Department’s jobs report captured the period including the 12th of the month, and in mid-July, weekly unemployment insurance claims worsened for two consecutive weeks after months of improvement.” data-reactid=”51″>Ahead of the July jobs report, other recent data also reflected a braking recovery in the labor market. The reference week for the Labor Department’s jobs report captured the period including the 12th of the month, and in mid-July, weekly unemployment insurance claims worsened for two consecutive weeks after months of improvement.
<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Plus, the closely watched ADP National Employment Report released Wednesday showed private payrolls rose by a meager 167,000 in July. Consensus economists had expected private employers added back 1.2 million payrolls, after an upwardly revised 4.3 million additions in June.” data-reactid=”52″>Plus, the closely watched ADP National Employment Report released Wednesday showed private payrolls rose by a meager 167,000 in July. Consensus economists had expected private employers added back 1.2 million payrolls, after an upwardly revised 4.3 million additions in June.
The ADP report, however, has historically been an imprecise indicator of the “official” government-issued employment report. ADP’s initial print for May, June and now July payroll additions each ultimately undershot the data reflected in the Labor Department’s monthly reports.
<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="This post is breaking. Check back for updates.” data-reactid=”54″>This post is breaking. Check back for updates.
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<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Emily McCormick is a reporter for Yahoo Finance. Follow her on Twitter: @emily_mcck” data-reactid=”56″>Emily McCormick is a reporter for Yahoo Finance. Follow her on Twitter: @emily_mcck
<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Read more from Emily:” data-reactid=”57″>Read more from Emily:
OTTAWA – Canada’s unemployment rate held steady at 6.5 per cent last month as hiring remained weak across the economy.
Statistics Canada’s labour force survey on Friday said employment rose by a modest 15,000 jobs in October.
Business, building and support services saw the largest gain in employment.
Meanwhile, finance, insurance, real estate, rental and leasing experienced the largest decline.
Many economists see weakness in the job market continuing in the short term, before the Bank of Canada’s interest rate cuts spark a rebound in economic growth next year.
Despite ongoing softness in the labour market, however, strong wage growth has raged on in Canada. Average hourly wages in October grew 4.9 per cent from a year ago, reaching $35.76.
Friday’s report also shed some light on the financial health of households.
According to the agency, 28.8 per cent of Canadians aged 15 or older were living in a household that had difficulty meeting financial needs – like food and housing – in the previous four weeks.
That was down from 33.1 per cent in October 2023 and 35.5 per cent in October 2022, but still above the 20.4 per cent figure recorded in October 2020.
People living in a rented home were more likely to report difficulty meeting financial needs, with nearly four in 10 reporting that was the case.
That compares with just under a quarter of those living in an owned home by a household member.
Immigrants were also more likely to report facing financial strain last month, with about four out of 10 immigrants who landed in the last year doing so.
That compares with about three in 10 more established immigrants and one in four of people born in Canada.
This report by The Canadian Press was first published Nov. 8, 2024.
The Canadian Institute for Health Information says health-care spending in Canada is projected to reach a new high in 2024.
The annual report released Thursday says total health spending is expected to hit $372 billion, or $9,054 per Canadian.
CIHI’s national analysis predicts expenditures will rise by 5.7 per cent in 2024, compared to 4.5 per cent in 2023 and 1.7 per cent in 2022.
This year’s health spending is estimated to represent 12.4 per cent of Canada’s gross domestic product. Excluding two years of the pandemic, it would be the highest ratio in the country’s history.
While it’s not unusual for health expenditures to outpace economic growth, the report says this could be the case for the next several years due to Canada’s growing population and its aging demographic.
Canada’s per capita spending on health care in 2022 was among the highest in the world, but still less than countries such as the United States and Sweden.
The report notes that the Canadian dental and pharmacare plans could push health-care spending even further as more people who previously couldn’t afford these services start using them.
This report by The Canadian Press was first published Nov. 7, 2024.
Canadian Press health coverage receives support through a partnership with the Canadian Medical Association. CP is solely responsible for this content.
As Canadians wake up to news that Donald Trump will return to the White House, the president-elect’s protectionist stance is casting a spotlight on what effect his second term will have on Canada-U.S. economic ties.
Some Canadian business leaders have expressed worry over Trump’s promise to introduce a universal 10 per cent tariff on all American imports.
A Canadian Chamber of Commerce report released last month suggested those tariffs would shrink the Canadian economy, resulting in around $30 billion per year in economic costs.
More than 77 per cent of Canadian exports go to the U.S.
Canada’s manufacturing sector faces the biggest risk should Trump push forward on imposing broad tariffs, said Canadian Manufacturers and Exporters president and CEO Dennis Darby. He said the sector is the “most trade-exposed” within Canada.
“It’s in the U.S.’s best interest, it’s in our best interest, but most importantly for consumers across North America, that we’re able to trade goods, materials, ingredients, as we have under the trade agreements,” Darby said in an interview.
“It’s a more complex or complicated outcome than it would have been with the Democrats, but we’ve had to deal with this before and we’re going to do our best to deal with it again.”
American economists have also warned Trump’s plan could cause inflation and possibly a recession, which could have ripple effects in Canada.
It’s consumers who will ultimately feel the burden of any inflationary effect caused by broad tariffs, said Darby.
“A tariff tends to raise costs, and it ultimately raises prices, so that’s something that we have to be prepared for,” he said.
“It could tilt production mandates. A tariff makes goods more expensive, but on the same token, it also will make inputs for the U.S. more expensive.”
A report last month by TD economist Marc Ercolao said research shows a full-scale implementation of Trump’s tariff plan could lead to a near-five per cent reduction in Canadian export volumes to the U.S. by early-2027, relative to current baseline forecasts.
Retaliation by Canada would also increase costs for domestic producers, and push import volumes lower in the process.
“Slowing import activity mitigates some of the negative net trade impact on total GDP enough to avoid a technical recession, but still produces a period of extended stagnation through 2025 and 2026,” Ercolao said.
Since the Canada-United States-Mexico Agreement came into effect in 2020, trade between Canada and the U.S. has surged by 46 per cent, according to the Toronto Region Board of Trade.
With that deal is up for review in 2026, Canadian Chamber of Commerce president and CEO Candace Laing said the Canadian government “must collaborate effectively with the Trump administration to preserve and strengthen our bilateral economic partnership.”
“With an impressive $3.6 billion in daily trade, Canada and the United States are each other’s closest international partners. The secure and efficient flow of goods and people across our border … remains essential for the economies of both countries,” she said in a statement.
“By resisting tariffs and trade barriers that will only raise prices and hurt consumers in both countries, Canada and the United States can strengthen resilient cross-border supply chains that enhance our shared economic security.”
This report by The Canadian Press was first published Nov. 6, 2024.
