Canada: Labour market continues to race ahead - CIBC

The Canadian employment report of February was released today. According to Royce Mendes, analysts at CIBC, while other indicators have been downshifting in recent months, Canada’s Labour Force Survey shows that hiring has been racing ahead.

Key Quotes: 

“The economy created 56K jobs in February according to the LFS, with all of the gains coming in the form of full-time employment. Adding to the good news, it was apparently the private sector doing the bulk of hiring, adding 41K jobs on the month. From a longer-term perspective, the LFS appears to have now mostly closed the gap in hiring that had opened up relative to the payroll survey.”

“Even with another blowout number, the unemployment rate didn’t budge from 5.8%. That’s because, for the second month in a row, more Canadians were participating in the labour force.”

“Wages also accelerated in February, with average hourly earnings for permanent workers now up 2.2% over the past year. While that’s nothing to really write home about, it’s still a decent acceleration from the 1.5% reading seen at the end of 2018, particularly because the Ontario minimum wage increase from last year is no longer artificially boosting the year-on-year comparison.”

“The latest employment reading is a sign that maybe the Canadian economy didn’t completely stall in the first quarter as some now see as being true. But this survey can be volatile and we’ll need some encouraging activity readings in the weeks ahead to confirm that view.”

“The Canadian dollar is stronger and yields are higher as traders rethink just how likely it is that the next move is a cut if the economy is churning out jobs at such a pace.”