Manitoba Daily

Sunday, October 1, 2023

Canada’s job market exceeds estimates, quadrupling growth

Canada's job market exceeds estimates, with growth quadrupling

Key takeaways:

  • Because of the expiration of income support programmes, Canada’s job market surpassed expectations in November.
  • In November, the average hourly salary rate increased by 2.7 percent over the previous year, up from 2% in October.

In November, Canada’s labor market outperformed forecasts, thanks to the expiration of income support programs, which fueled new hiring.

Statistics Canada said Friday in Ottawa that employment increased by 153,700 last month. As per the median estimate in a Bloomberg survey, that’s more than quadruple the 37,500 gain economists predicted.

The figures highlight how close the economy is to reaching full employment when businesses are concerned about labor shortages and policymakers are pondering methods to slow down the recovery.

Also read: Last month, more than half of Manitoba’s doctors were victims of abuse

From 6.7 percent in October, the unemployment rate has dropped to 6%, which is extremely close to pre-pandemic norms. Employment has increased by 186,000 jobs since February 2020. Hours worked increased by 0.7 percent for the first time, fully recouping Covid losses.

On 10:25 a.m. in Toronto, the Canadian dollar was up 0.2 percent to C$1.279 per US dollar. Two-year government bond yields increased by 7 basis points to 1.04 percent.

The gains in November reflect many people leaving the labor force. This phenomenon corresponded with Prime Minister Justin Trudeau’s government’s decision to end a crucial individual assistance program in October. 

Last month, unemployment was reduced by 122,000 people, compared to 56,200 in October. People who had been unemployed for 52 weeks or more accounted for a large portion of the reduction.

By email, Benjamin Reitzes, Canadian rates and macro strategist at Bank of Montreal, said, “We cautioned the risks were toward a considerably stronger report as pandemic support programs concluded in late October — and that’s exactly what we got.”

Canadas job market blows past estimates quadrupling gains
Canadas job market blows past estimates quadrupling gains

The job-finding rate — the percentage of unemployed Canadians who appear to have found work in November — increased to 37%, the highest level since March of last year.

Friday’s news aligns with recent data suggesting that the income-support programs, which began in April 2020, may have slowed job growth. 

According to the job posting site Indeed Canada, the percentage of persons actively seeking work increased to 30% in October, up from 25% in September. Unemployed workers who rated their search as urgent accounted for most of the rise.

Employers appear to be employing as many workers as they can in an economy with over 1 million job openings while retaining existing employees. For the first time since 1976, the job separation rate — the percentage of working Canadians who become unemployed — fell to just under 2% in November.

The pay data also show indicators of tightening labor market conditions. In November, the average hourly salary rate increased by 2.7 percent over the previous year, up from 2% in October. Wages for permanent staff have increased by 3%.

Source: ALjazeera

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