Help wanted in Toronto
By Ismail Shakil and Steve Scherer
Fri, July 7, 2023
OTTAWA (Reuters) -Canada's economy added far more jobs than expected in June, data showed on Friday, a result analysts said probably seals the deal for another Bank of Canada (BoC) interest rate hike next week.
Jobs increased by a net 59,900 in June, the most since January and higher than a forecast gain of 20,000, while the jobless rate rose to 5.4% from 5.2% as more people searched for work, Statistics Canada data showed on Friday.
The unemployment rate in June increased for the second consecutive month and is now at its highest level since February 2022, though still below a pre-pandemic 12-month average, Statscan said.
The June jobs report is the last major economic figure to be released before the BoC's rate announcement on Wednesday.
The jobs figures "are good enough to give the green light for the bank to hike next week," said Derek Holt, vice president of capital markets economics at Scotiabank. "We still have a jobs market that is holding on quite nicely."
The central bank raised its overnight rate to a 22-year high of 4.75% last month on concerns about sticky inflation and said that further moves would be dependent on the latest economic figures.
Data in the past month have shown some signs of a slowdown - inflation cooling to 3.4%, a tepid May jobs report and a surprise trade deficit in May - but not enough to diminish market expectations of another rate hike.
Growth has remained resilient despite nine rate increases totaling 450 basis points since March of last year. The economy regained momentum in May, likely growing 0.4% on the month, after stalling in April.
"The return to solid job growth in June should ... lock in a second consecutive 25-basis-point rate increase next week as central bankers scramble to tamp down the surprisingly resilient economy and resultant excess inflationary pressures," said Royce Mendes, head of macro strategy at Desjardins Group.
A large majority of economists polled by Reuters also expect the bank to lift rates by another quarter-point and then hold well into 2024.
The Canadian dollar was trading 0.3% higher at 1.3328 to the greenback, or 75.03 U.S. cents.
The average hourly wage for permanent employees - a figure the Bank of Canada watches closely - rose 3.9% from June 2022, compared with a 5.1% year-over-year increase in May. It was the smallest increase in wages in 14 months.
The net jobs addition in June, the largest since January, were driven by full-time work. Employment gains were concentrated among men aged 15 to 24 as well as the core 25 to 54 age group, while employment among women of all age groups was little changed in June.
Employment in the goods sector increased by a net 9,800 jobs, mainly in the manufacturing sector, while a net 50,000 services jobs were added in June, led by wholesale and retail trade, as well as the healthcare and social assistance sectors.
(Reporting by Ismail Shakil and Steve Scherer in Ottawa; Additional reporting by Dale Smith in Ottawa, Editing by Emelia Sithole-Matarise and Mark Porter)
Bank of Canada expected to raise rates next week, despite rise in unemployment rate
By: Nojoud Al Mallees,
By: Nojoud Al Mallees,
The Canadian Press
Friday, Jul. 7, 2023
OTTAWA – The Canadian labour market is showing some signs of softening as the unemployment rate rises and wage growth slows, but with another solid job gain last month, forecasters are still expecting a rate hike next week.
Statistics Canada reported Friday the economy added 60,000 jobs in June, driven by gains in full-time work.
But as more Canadians searched for work and the population continued to grow, the unemployment rate climbed higher to 5.4 per cent, the highest it’s been in a year.
OTTAWA – The Canadian labour market is showing some signs of softening as the unemployment rate rises and wage growth slows, but with another solid job gain last month, forecasters are still expecting a rate hike next week.
Statistics Canada reported Friday the economy added 60,000 jobs in June, driven by gains in full-time work.
But as more Canadians searched for work and the population continued to grow, the unemployment rate climbed higher to 5.4 per cent, the highest it’s been in a year.
A "Now Hiring" sign is displayed on a business in Montreal on Tuesday, May 30, 2023. Statistics Canada is set to release employment figures for June this morning.
THE CANADIAN PRESS/Christinne Muschi
“The reason the unemployment rate can rise alongside historically strong employment growth is that population growth continues to set new records — including an 84k monthly increase in June,” wrote RBC assistant chief economist Nathan Janzen in a note to clients.
June marked the second month in a row the unemployment rate has risen as economists watch for softening in the labour market amid high interest rates.
Job gains were concentrated in wholesale and retail trade, manufacturing, health care and social assistance and transportation and warehousing.
The loosening of the labour market likely comes as good news to the Bank of Canada, which is looking for signs that its aggressive rate hikes are working to cool the economy.
But forecasters are still expecting the central bank to raise interest rates at its next interest rate decision on Wednesday.
“The June labour market data was mixed but shouldn’t be enough to prevent the Bank of Canada from following through with a second straight 25 basis point interest rate hike at the next policy decision next week,” Janzen said.
The central bank opted to end its pause on rate hikes in June after a string of economic data suggested interest rates weren’t high enough.
The quarter percentage point rate hike brought its key rate to 4.75 per cent, the highest it’s been since 2001.
The central bank has said repeatedly that Canada’s hot labour market is contributing to high inflation, raising concerns about the pace of wage growth in particular.
However, Statistics Canada said wage growth also softened last month, rising 4.2 per cent from a year ago. That compared with a year-over-year gain of 5.1 per cent in May.
The central bank hasn’t given any clear indication of its plans, saying it will make its decision based on the economic data.
This report by The Canadian Press was first published July 7, 2023.
“The reason the unemployment rate can rise alongside historically strong employment growth is that population growth continues to set new records — including an 84k monthly increase in June,” wrote RBC assistant chief economist Nathan Janzen in a note to clients.
June marked the second month in a row the unemployment rate has risen as economists watch for softening in the labour market amid high interest rates.
Job gains were concentrated in wholesale and retail trade, manufacturing, health care and social assistance and transportation and warehousing.
The loosening of the labour market likely comes as good news to the Bank of Canada, which is looking for signs that its aggressive rate hikes are working to cool the economy.
But forecasters are still expecting the central bank to raise interest rates at its next interest rate decision on Wednesday.
“The June labour market data was mixed but shouldn’t be enough to prevent the Bank of Canada from following through with a second straight 25 basis point interest rate hike at the next policy decision next week,” Janzen said.
The central bank opted to end its pause on rate hikes in June after a string of economic data suggested interest rates weren’t high enough.
The quarter percentage point rate hike brought its key rate to 4.75 per cent, the highest it’s been since 2001.
The central bank has said repeatedly that Canada’s hot labour market is contributing to high inflation, raising concerns about the pace of wage growth in particular.
However, Statistics Canada said wage growth also softened last month, rising 4.2 per cent from a year ago. That compared with a year-over-year gain of 5.1 per cent in May.
The central bank hasn’t given any clear indication of its plans, saying it will make its decision based on the economic data.
This report by The Canadian Press was first published July 7, 2023.
National employment numbers for June from Statistics Canada, at a glance
OTTAWA — A quick look at Canada's June employment (numbers from the previous month in brackets):
Unemployment rate: 5.4 per cent (5.2)
Employment rate: 62.2 per cent (62.1)
Participation rate: 65.7 per cent (65.5)
Number unemployed: 1,147,100 (1,093,000)
Number working: 20,172,800 (20,112,900)
Youth (15-24 years) unemployment rate: 11.5 per cent (10.7)
Men (25 plus) unemployment rate: 4.4 per cent (4.3)
Women (25 plus) unemployment rate: 4.4 per cent (4.2)
Here's a quick glance at unemployment rates for June, by province
OTTAWA — Canada's national unemployment rate was 5.4 per cent in June. Here are the jobless rates last month by province (numbers from the previous month in brackets):
_ Newfoundland and Labrador 8.8 per cent (10.2)
_ Prince Edward Island 8.2 per cent (7.2)
_ Nova Scotia 6.4 per cent (5.7)
_ New Brunswick 6.4 per cent (6.1)
_ Quebec 4.4 per cent (4.0)
_ Ontario 5.7 per cent (5.5)
_ Manitoba 4.3 per cent (4.8)
_ Saskatchewan 4.7 per cent (4.4)
_ Alberta 5.7 per cent (5.7)
_ British Columbia 5.6 per cent (5.0)
This report by The Canadian Press was first published July 7, 2023.
OTTAWA — A quick look at Canada's June employment (numbers from the previous month in brackets):
Unemployment rate: 5.4 per cent (5.2)
Employment rate: 62.2 per cent (62.1)
Participation rate: 65.7 per cent (65.5)
Number unemployed: 1,147,100 (1,093,000)
Number working: 20,172,800 (20,112,900)
Youth (15-24 years) unemployment rate: 11.5 per cent (10.7)
Men (25 plus) unemployment rate: 4.4 per cent (4.3)
Women (25 plus) unemployment rate: 4.4 per cent (4.2)
Here's a quick glance at unemployment rates for June, by province
OTTAWA — Canada's national unemployment rate was 5.4 per cent in June. Here are the jobless rates last month by province (numbers from the previous month in brackets):
_ Newfoundland and Labrador 8.8 per cent (10.2)
_ Prince Edward Island 8.2 per cent (7.2)
_ Nova Scotia 6.4 per cent (5.7)
_ New Brunswick 6.4 per cent (6.1)
_ Quebec 4.4 per cent (4.0)
_ Ontario 5.7 per cent (5.5)
_ Manitoba 4.3 per cent (4.8)
_ Saskatchewan 4.7 per cent (4.4)
_ Alberta 5.7 per cent (5.7)
_ British Columbia 5.6 per cent (5.0)
This report by The Canadian Press was first published July 7, 2023.
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