Interest rates headed higher after Canada's job gains blow past expectations via financialpost
“The surge in employment and rise in the labour force make this an incredibly positive print,” Toronto-Dominion Bank economist James Orlando’s said in a note to clients. “The fact that most of the gains were full-time positions in the private sector and spanned many industries further supports the robustness of today’s numbers.
”Article contentHiring data are always important. But these numbers are more important than usual because the Bank of Canada is unsure whether it’s raising interest rates enough to crush inflation, which jumped out of the central bank’s comfort zone in 2021 and remains uncontained. The central bank spent almost all of 2022 trying to cool an economy that it said was in “excess demand,” stoking inflation to dangerous levels. Year-over-year increases in the consumer price index surged to 8.1 per cent in June, and were still hovering around seven per cent through the fall, well outside the Bank of Canada’s target of two per cent. In response, policymakers pushed the benchmark lending rate by year-end to 4.25 per cent, an increase of four percentage points from March, representing the most aggressive series of interest-rate increases in the Bank of Canada’s history.Article content Yet employers continued to report that they were desperately short of workers. They hired 104,000 people in December, Statistics Canadaon Jan. 6, defying Bay Street expectations of a modest increase of around 5,000 positions. At five per cent, the jobless rate is much lower than anything mainstream economists tend to associate with “full employment,” the theoretical condition at which everyone who wants to work can find a job. Full employment is a sign of strength, but it also suggests inflationary pressures are building. Average hourly wages were 5.1 per cent higher than in December 2021, the seventh consecutive month that wage gains exceeded five per cent, Statistics Canada said. That’s an unusually strong rate of wage growth, which the Bank of Canada will see as evidence of inflation, since wage demands tend to influence prices for goods and services.Article content The hiring numbers will create dissonance for the many forecasters who published bleak outlooks at the end of 2022. Indeed, the Bank of Canada itself predicted that growth would stall over the next few months, implying a recession is possible. Many will point out that employment is a “lagging indicator,” reflecting decisions based on economic conditions months ago, rather than foresight about what might be coming. Still, there’s no denying the Canadian economy ended the year with considerable momentum. “The jobs numbers might be backward looking, but through the end of 2022, the Canadian labour market remained rock solid,” Brendon Bernard, an economist at Indeed Inc., a hiring website, said in an email. “The clouds on the horizon haven’t rained on the labour market’s parade.”Article content
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Canada gains more than 100,000 jobs, blowing past expectationsCanada\u0027s unemployment rate declined to 5%, just above the record low of 4.9% reached in June and July, Statistics Canada says. Read more
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Canada gains more than 100,000 jobs, blowing past expectationsCanada\u0027s unemployment rate declined to 5%, just above the record low of 4.9% reached in June and July, Statistics Canada says. Read more
Read more »
Canada gains more than 100,000 jobs, blowing past expectationsCanada\u0027s unemployment rate declined to 5%, just above the record low of 4.9% reached in June and July, Statistics Canada says. Read more
Read more »
Canada gains more than 100,000 jobs, blowing past expectationsCanada\u0027s unemployment rate declined to 5%, just above the record low of 4.9% reached in June and July, Statistics Canada says. Read more
Read more »
Canada gains more than 100,000 jobs, blowing past expectationsCanada\u0027s unemployment rate declined to 5%, just above the record low of 4.9% reached in June and July, Statistics Canada says. Read more
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