Business

Canada added 157,100 jobs in September, hiring returns to pre-pandemic levels-updated

Kim McLael and Paul Vieira

 

The Ottawa-Canada economy was surprised by a far higher-than-expected increase in employment in September, returning unemployment to less than 7% and returning employment levels to pre-pandemic levels for the first time since its widespread closure in the spring of 2020.

Strong data has strengthened expectations among some economists that the Bank of Canada may move to the so-called reinvestment phase of its quantitative easing program later this month. At that stage, banks bought only enough bonds to replace maturity bonds, marking an important milestone in eliminating the anomalous stimulus that spread during the pandemic.

Statistics Canada reported on Friday that the Canadian economy added net 157,100 jobs in September, following a 90,200 increase last month. According to TD Securities economists, the market forecast for September was up 60,000.

The unemployment rate fell to 6.9%, meeting market expectations and falling below 7% for the first time since the outbreak of the pandemic. Prior to the pandemic, Canada’s unemployment rate was 5.7%. Canada’s unemployment rate in September was 5.6%, calculated using the US Ministry of Labor methodology.

“The September employment report was great,” said Jimmy Jean and Michael Deutsch Heng, economists at Dejardan Securities, on Friday. They said the Bank of Canada should strengthen its confidence in the economic recovery and increase the likelihood that the central bank will further withdraw its quantitative easing program.

Meanwhile, the US economy added 194,000 jobs in September, dropping the unemployment rate to 4.8%. This was due to tight labor markets and ongoing concerns about the Covid-19 delta variant, which curtailed employment.

Canada’s strong employment results in September show another sign that the domestic economy is recovering after a spring slowdown, partly due to the turmoil in the global supply chain. The country’s gross domestic product shrank at an annual rate of 1.1% in the second quarter and fell slightly month-on-month in July. Statistics Canada’s initial estimates suggest a 0.7% step up from the previous month in August.

According to economists, data so far have put the economy on track for strong growth in the third quarter, but the Bank of Canada’s latest forecast forecasts annual growth of 7.3% between July and September. It is likely to be a slower pace than.

Bank of Canada Governor Tiff McClem said at a press conference Thursday that the central bank expects GDP growth to continue to recover well in the third quarter. But supply chain turmoil probably means “a little slower than what was announced in July,” he said.

The recent surge in delta variant-powered Covid-19 cases has been relatively well suppressed in Canada compared to the United States and several other major economies, partly due to high immunization rates in Canada. I am.

The central bank’s next interest rate decision is due on October 27th. Several economists said Friday’s employment data was likely sufficient to convince policy makers to pull back the bank’s bond-buying program further. Equivalent to $ or $ 1.59 billion. The savings expected by some economists to C $ 1 billion will take the central bank to a stage called the reinvestment phase, which will not gradually add stimulus to the economy.

Labor markets haven’t fully recovered yet, but CIBC Capital Markets analyst Royce Mendes said September employment data could “seal” transactions for another taper in the quantitative easing program. Said that was high.

According to a September report, all net employment added that month was a full-time position. The private sector has added about 98,000 positions and the public sector has increased about 78,000 positions. The ranks of self-employed people, who tend to be independent contractors, have changed little this month.

Working hours in September increased by 1.1%, but below pre-pandemic levels. The labor shortage rate in September, the percentage of unemployed or less than usual working hours, dropped to only 13.8%.

 

Write to Kim Mackrael (kim.mackrael@wsj.com) and Paul Vieira (paul.vieira@wsj.com).

 

Correction and amplification

This article was revised at 10:07 EST due to incorrect exchange rates. The central bank’s bond purchase program is currently targeting a level equivalent to $ 1.59 billion, rather than $ 2 billion a week, or $ 12.59 billion.

Canada added 157,100 jobs in September, hiring returns to pre-pandemic levels-updated

Source link Canada added 157,100 jobs in September, hiring returns to pre-pandemic levels-updated

Back to top button