Ottawa, Oct. 8 (BUS): Canada’s economy posted massive job gains in September, pushing employment to pre-pandemic levels, and the unemployment rate hitting an 18-month low, Statistics Canada data indicated on Friday.
Analysts said the numbers showed the recovery from the COVID-19 pandemic was accelerating, but they expected the Bank of Canada would want to see consistent evidence of strength before taking a more aggressive stance on the timing of interest rate hikes, Reuters reported.
Statistics Canada reported a net gain of 157,100 new jobs, all of them in full-time jobs. The unemployment rate fell to 6.9%, the lowest level since February 2020.
Analysts polled by Reuters had expected the country to add 65,000 new jobs in September and its unemployment rate to fall to 6.9 percent from 7.1 percent in August.
Statscan said Canada is now back to employment levels it was at before the COVID-19 pandemic emerged last year, having regained the 3 million jobs lost during the crisis.
“It is very strong and shows that Canada is doing well in the fourth wave,” said Jamie Jane, chief economist at Desjardins, saying that the central bank may announce later in October that it is continuing to scale back its quantitative easing programme.
All job gains came in full-time jobs, which recorded an increase of 193,600 new jobs, and were split evenly between the public and private sectors. The economy has eliminated 36,500 part-time jobs.
The Bank of Canada cut interest rates to a record low of 0.25% last year and says it will not consider raising them again until the economy absorbs the excess recession, which it expects to occur in the second half of 2022.
Due to population growth, there are still 276,000 more unemployed than there were in February 2020.
“The Bank of Canada would still like to see further improvement from here because its goal is not just to return to the number of jobs before the pandemic, it is (to) return to the pre-pandemic employment ratio,” said Andrew Kelvin, chief Canada strategist at TD Securities.
The Canadian dollar touched its strongest level since August 11 at 1.2490 per dollar, or 80.06 US cents, up 0.5% on the day. Separately, data showed US employment increased much less than expected in September.
Royce Mendes, chief economist at CIBC Capital Markets, noted that while the number of hours worked rose by 1.1%, it remained 1.5% below its level before the pandemic.
“While printing the headline will likely trigger another Bank of Canada taper deal later this month, there are still avenues to be taken to fully address the labor market,” he said in a note.
NS