Thu. Jan 20th, 2022

The figures show how close Canada is to full employment. The unemployment rate dropped to 6 percent – very close to pre-pandemic levels – from 6.7 percent in October.

Canada’s labor market hovered above expectations in November as the end of income support programs helped fuel new appointments.

Employment rose 153,700 last month, Statistics Canada reported in Ottawa on Friday. That is more than four times the 37,500 profit that economists predicted, according to the median estimate in a Bloomberg survey.

The figures show just how close the country’s economy is to full employment at a time when businesses are worried about labor shortages and policymakers are considering ways to cool the recovery.

The unemployment rate fell to 6% – very close to pre-pandemic levels – from 6.7% in October. Employment is now 186,000 more jobs than it was in February 2020. Hours worked rose 0.7%, fully recovering Covid losses for the first time.

The Canadian dollar rose in Toronto at 10:25, up 0.2% to C $ 1,279 per US dollar. Yields on two-year government bonds rose by 7 basis points to 1.04%.

November’s gains reflect large numbers of people leaving the ranks of unemployment, a development that coincided with Prime Minister Justin Trudeau’s government decision to end its key individuals’ support program in October. Unemployment levels fell by 122,000 last month, from 56,200 in October. Many of those declines were people who were out of work for 52 weeks or longer.

“We warned that the risks were in the direction of a much stronger report, as pandemic support programs ended at the end of October – and that’s exactly what we got,” said Benjamin Reitzes, Canadian tariff and macro strategist at Bank of Montreal. email said.

The job search rate – the share of unemployed Canadians in October who apparently get jobs in November – has risen to 37%, the highest since March last year.

Friday’s report is consistent with other data suggesting that the income support programs that began in April 2020 may have held back earnings. The share of people actively looking for work rose to 30% in October, from 25% in September, according to job placement website Indeed Canada. The increase was largely driven by unemployed workers who described their search as immediate.

Apparently, in an economy with more than 1 million vacancies, employers hire as many workers as they can, and stick to existing workers. The employment rate – the share of working Canadians entering the unemployment ranks – fell for the first time in data back to 1976 in November to just under 2%.

There are also signs of tighter labor market conditions in wage numbers. The average hourly wage rate in November was 2.7% higher than a year ago, an acceleration from 2% in October. For permanent employees, wages are 3% higher.

Rate implications

The data will only confirm expectations that interest rates are about to rise. Markets price in five Bank of Canada interest rate hikes next year.

“Labor markets are tightening sharply, and this is positioning the Bank of Canada to rise earlier than we expected,” Royce Mendes, an economist at Canadian Imperial Bank of Commerce, said in an email.

Profits were split almost evenly between part-time and full-time, with growth led by the private sector. The services sector was responsible for a majority of new jobs, led by healthcare, retail and professional services. Manufacturing was responsible for all the labor gains in the goods producing sector.

The results of the survey did not capture the impact of the severe floods that occurred in British Columbia, according to Statistics Canada.

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