Canada’s Economy Adds 259,000 Jobs, Blowing Past Expectations
Canada’s labor market roared back to life in February after authorities began lifting lockdowns.
The economy added 259,200 jobs, Statistics Canada reported Friday in Ottawa, well ahead of economist expectations for a 75,000 gain. That’s the first month of job gains since November, when a new set of containment measures were implemented to curb the second wave of Covid-19 cases. The unemployment rate fell to 8.2%, the lowest since the very beginning of the pandemic, down from 9.4% in January. Economists were anticipating a 9.2% jobless rate.
Friday’s better-than-expected report should ease worries about widespread scarring in the labor market from the pandemic, and stoke expectations the Bank of Canada will soon start tightening ultra-easy monetary policy. The central bank -- which has pledged not to raise record low interest rates before damage to the economy is fully repaired -- has begun to put more weight on labor-market indicators as it gauges the degree of stimulus needed in the economy.
Veronica Clark, an economist at Citigroup Global Markets, called the results “amazing,” noting that they beat even her optimistic estimate of 150,000 new jobs. She expressed confidence that accelerating vaccinations after a slow start would keep the hiring momentum going.
“As long as there are no further hiccups there, it means more reopenings and a further return to normal,” she said.
The Canadian dollar was little changed at C$1.2541 per U.S. dollar as of 8:49 a.m. in Toronto. Yields on Canadian government five-year bonds were up 0.5 percentage points to 0.98%.
The strong result mirrors the U.S. payrolls report for February, which exceeded expectations with an increase of 379,000 jobs, driven by reopening in the leisure and hospitality sector.
Even with the gain in February, employment in Canada is still 599,000 below pre-pandemic levels. There are also another 406,000 people working less than half of their usual hours, the agency said.
Part-time employment increased by 171,000 while full-time employment rose by 88,000 reflecting a sizeable rebound in retail trade, food and accommodation industries as regions lifted holiday-related restrictions.
The accommodation and food services sector posted gains of 65,000, the report said. Broadly, February’s employment gains were concentrated in lower-waged work -- the sectors that have been the hardest hit by the pandemic.
The labor underutilization rate -- a measure that includes not only unemployed workers but those working fewer hours because of Covid-19 -- fell to its lowest level since the start of the pandemic.