2024-10-11 21:26:00
The Canadian economy added 47,000 jobs in September, while the unemployment rate fell to 6.5%, marking its first decline since January. In Quebec, the unemployment rate decreased by 0.2 percentage points to stand at 5.5%.
The report is stronger than expected, said Leslie Preston, TD senior economist.
She warned that the monthly jobs report can be volatile and that the long-term trend in the Canadian labor market is downward.
“I would probably characterize this as a break in the trend of a slowing labor market,” she said.
Economists polled by Reuters had forecast that employers added 27,000 jobs in September and expected the unemployment rate to have risen to 6.7%.
According to Statistics Canada, young people and women aged 25 to 54 were the drivers of job growth last month, while full-time employment saw its largest increase since May 2022.
“Fundamentally, this report flies in the face of every assumption that most analysts had about the Canadian labor market,” Douglas Porter, BMO’s chief economist, said in a note.
The “strong” increase in jobs contradicts the idea that Canada’s job market is weakening, he added, with the unemployment rate having unexpectedly fallen and full-time employment soaring. “The employment gains were led by an increase of 61,200 private sector jobs,” he wrote. Looking at the overall trend, the unemployment rate has been rising steadily over the past year and a half, reaching 6.6% in August. Inflation that month was 2%, its lowest level in more than three years.
In Quebec, employment increased by 21,700 in September, boosted by growth in full-time work, Statistics Canada said. Full-time employment jumped further in the province, with 50,900 new jobs in September compared to August.
The Bank of Canada’s key rate
The Bank of Canada has lowered its key interest rate three times this year, after raising it to combat inflation, and is widely expected to continue cutting it as inflation rises. subsides.
The key rate is currently at 4.25%. The next Bank of Canada cut is scheduled for October 23.
“I think the Bank of Canada would have to see a more rapid deterioration in Canada’s economic outlook to move toward a reduction [de 50 points de base] », affirmed Mme Preston.
Not everyone agrees. RBC deputy chief economist Nathan Janzen wrote in a note Friday that the bank expects a half-percentage-point cut in October and another in December.
“The details behind the September employment numbers were much more mixed than the employment and unemployment numbers alone would suggest,” he wrote.
Despite the aforementioned gains, the employment rate declined in September, reflecting continued growth in the Canadian population.
Statistics Canada reports that since the employment rate reached its most recent peak of 62.4% in January and February 2023, it has been on a downward trend as population growth has outpaced employment growth.
On an annual basis, employment increased by 1.5% in September, while the population aged 15 and over increased by 3.6% during the same period.
Douglas Porter noted that despite the positive news in Friday’s report, there are some “weak spots,” including declines in total hours worked and participation rate.
Services sectors were responsible for all the gains in September, he said.
The information, culture and leisure sector saw employment increase by 2.6% between August and September, after seven relatively stable months, Statistics Canada said. The increase is concentrated in Quebec.
The wholesale and retail trade sector saw its first increase since January, jumping 0.8%, while employment in professional, scientific and technical services rose 1.1%.
The average hourly wage for employees increased 4.6% year over year to $35.59, a slowdown from the 5% increase recorded in August.
The unemployment rate for Black and South Asian Canadians aged 25 to 54 increased year-over-year in September and was significantly higher than the unemployment rate for non-racialized and non-Indigenous people.
The unemployment rate for Black Canadians in this age group increased to 11% last month, while that for South Asian Canadians was 7.3%. That of non-racialized and non-Indigenous people increased to 4.4%.
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