The numbers: Restaurants and other businesses hired the most workers in March in seven months as the U.S. added 916,000 new jobs, signaling the economy is primed for a period of rapid expansion again.
Employment accelerated after the weather warmed and a decline in coronavirus cases allowed states to relax business restrictions. Rising vaccination rates gave Americans more freedom to venture out to eat, attend a game, travel or engage in other activities they would have avoided at the height of the pandemic.
Massive federal fiscal stimulus, including $1,400 checks for most households, also gave people more money to spend.
The U.S. regained 916,000 jobs in March to mark the biggest increase since last fall.
The jobs explosion in March easily exceeded Wall Street forecasts. Economists polled by Dow Jones and The Wall Street Journal had forecast a 675,000 increase.
Hiring in February and January was also much stronger than previously reported.
Economists predict even faster hiring in the months ahead if most Americans get vaccinated and the coronavirus pandemic fades away, though it will take a while to know for sure. Covid-19 cases in the U.S. have actually risen slightly in the past few weeks for the first time in several months.
The official unemployment rate, meanwhile, slipped to 6% from 6.2%, the Labor Department said Friday. Yet the official rate doesn’t capture nearly 4 million people who lost their jobs last year and left the labor force.
Economists peg the true unemployment rate at above 9%.
What happened: Companies in leisure and hospitality hired the most people in March. They added 280,000 jobs to bring total employment gains in the past two months to 664,000.
Restaurants were at the forefront, creating 176,000 new jobs. More Americans are going out to eat and the numbers are expected to grow as most of the country gets vaccinated and spring arrives. People are eager to go out after being stuck at home for the past year.
Employment in construction bounced back after a decline in February tied to poor weather. Builders hired 110,000 people, the largest increase in nine months.
Soaring home sales and a revival in commercial construction are fueling the biggest industry boom in more than a decade. The biggest problem is finding enough skilled workers.
Manufacturers, for their part, added 53,000 workers. The industrial side of the economy is also growly rapidly again and leading the U.S. recovery. Demand in many cases is so strong that companies can’t find enough raw materials, parts or other supplies to keep up.
Government employment also surged in March, mostly in state and local education. Some 136,000 jobs were added.
Hiring rose in every other major part of the economy except information services, a catchall category that includes media and public relations.
The number of jobs created in the first two months of the year was also revised up by a combined 156,000
The number of jobs created in February was revised 468,000 from 379,000. The increase in January was lifted to 233,000 from 166,000.
Nearly 350,000 people joined the labor force in March in another good sign, but the total is still about 3.9 million below pre-pandemic levels. Those missing workers are no longer counted in the official unemployment rate, helping to explain why it’s relatively low now.
A better measure of unemployment is the government’s so-called U6 rate that includes people who’ve recently stopped looking for work as well as those who can only find part-time jobs.
The U6 rate fell to 10.7% from 11.1%. It had reached a record 22.9% last April.
Big picture: The skies have cleared for the U.S. economy after a record surge in coronavirus cases clouded the outlook over the winter. Growth is likely to speed up through the spring and early summer if the vaccines do their job and keep the coronavirus pandemic at bay.
Yet even in a best-case scenario, the U.S. is unlikely to quickly recoup all of the 8.4 million jobs that are still missing one year after the onset of the pandemic. The destruction caused by the pandemic, including lost jobs and shuttered businesses, is likely to linger for a few years.
What they are saying? “Job growth is now accelerating across the nation, helped by massive fiscal stimulus and a now speedy vaccination program,” said senior economist Sal Guatieri of BMO Capital Markets.
“While we still have a long way to go to repair the damage that was done to the economy last year, we’re making good progress,” said Chris Zaccarelli, chief investment officer at Independent Advisor Alliance
Market reaction: The Dow Jones Industrial Average DJIA,
+0.52%
and S&P 500 SPX,
+1.18%
closed higher on Thursday to finish out a shortened week. Markets are closed on Friday due to the Good Friday holiday.
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.
