After a dismal jobs release for August, Canada’s labor market seems to have made a strong recovery with a stronger than expected employment change report for September. The economy added 74,100 jobs during the month, higher than the estimated 18,700 increase.
A closer look at the components of the report shows that most of the gains were spurred by full-time hiring, which chalked up a 69,300 monthly increase. Youth employment marked a 43,000 rise, its largest jump since May this year. Among the various industries, accommodation and food services contributed the most to hiring while educational services saw a sharp 44,000 decline.
Meanwhile, underlying labor indicators such as the participation rate and wage growth barely budged. The labor force participation rate held steady at 66% while average earnings were mostly flat.
Despite that, the jobless rate managed to improve from 7.0% to 6.8% in September. That’s its lowest level since December 2008!
Using the U.S. formula for computing the unemployment rate shows that Canada is head-to-head with its North American neighbor at 5.9% joblessness. Take that, Uncle Sam!
According to the Bank of Canada’s Business Outlook Survey released last week, increased optimism among Canadian firms may have spurred the pickup in hiring. In addition, exporters are projecting firmer demand from the U.S. and higher sales, which could lead to stronger employment prospects in the next few months.
Along with the latest CPI release, the September jobs report and the positive employment outlook are rays of hope for the Canadian economy. This might keep the Loonie supported against its forex rivals, some of which are facing the prospect of additional easing or possible currency intervention by their respective central banks.
However, some market analysts claim that the recent jobs rebound might still not be enough to change BOC Governor Poloz’s cautious stance. Recall that the Canadian central bank head previously cautioned that hiring seems to have hit a plateau and that a prolonged global economic slowdown could keep further employment gains at bay.
Do you think the latest Canadian economic data would be enough to keep the Loonie supported until the end of the year? Share your thoughts in our comment box or cast your votes in our poll below!