OTTAWA — Canada's unemployment rate fell for the first time in nearly a year to 8.4 per cent last month, in perhaps the clearest indication the hard-hit labour market may be recovering sooner than expected.
The September jobs pick-up of 30,600 was several times larger than the economist consensus forecast, which along with a slight decrease in the number of workers looking for jobs, helped drop the national unemployment rate by 0.3 percentage points.
This was the second consecutive month of employment gains.
There was more good news - actual hours worked increased by 1.6 per cent.
More impressive, the agency said 91,600 full-time jobs were added in September, more than offsetting the 61,000 loss in part-time employment.
This reverses the pattern observed most of the past year as employers cut back by first reducing full-time workers to part-time status.
"This is the sound an economy makes when an economy recovers," said Douglas Porter, deputy chief economist at BMO Capital Markets.
Economists consider employment a lagging indicator because employers usually will wait until they see clear signs that a recovery is underway and will be sustained before beginning to re-hire.
By contrast, the United States is still reporting massive monthly job losses even though most believe the economy there has turned the corner and begun to grow. It's unemployment rate is 9.8 per cent, 1.4 points ahead of Canada's.
The unexpectedly strong Statistics Canada report may have had an immediate impact on currency markets with the loonie jumping 0.83 cents to 95.87 cents US. early Friday.
The loonie's continuing rise against the greenback came as other major currencies slipped Friday against the U.S. dollar, which had fallen dramatic in recent days.
A strong Canadian dollar will make exports denominated in U.S. currency more difficult, putting a possible brake on the pace of economic recovery.
Statistics Canada reported Friday that Canada's merchandise exports and imports both fell in August after gains in July and the country's trade deficit with the world widened to $2 billion from $1.3 billion in July.
The value of exports dropped 5.1 per cent to $29.2 billion in August from $30.8 billion in July. Imports to Canada declined to $31.2 billion in August from $32.1 billion in July, primarily the result of a 2.6 per cent reduction in prices. Volumes were down jut 0.3 per cent.
Although the Bank of Canada said as recently as Thursday it sees little reason to back off its conditional commitment to keep interest rates at the record low until mid-2010, the heat is building.
Australia was the first of the advanced economies to reverse course and start raising interest rates this week, and some economists believe Canada - which has had a relatively mild recession compared to its peers - may be the next.
In a note to clients, Scotiabank economists Derek Holt and Karen Cordes said the jobs data will "feed growth prospects and inflation fears and raise market concerns regarding the Bank of Canada's conditional rate commitment," adding that the dollar "remains the (bank's) principal worry."
Canada has seen a fitful rebound from the downturn, although the most recent data on gross domestic product only extends to July and does not capture the next two months of job gains.
If there was a downside to the Canadian jobs data for September, it was that hourly wage growth slowed to 2.5 per cent, the lowest year-over-year wage gain in 2 1/2 years, and that all and more of the net job growth was in the public sector.
Also, adult men continue to have difficulty finding work. September saw a decline on employment among men aged 25 to 55, while women in the same age group saw employment rise by 41,000.
Since October, most of the employment losses have occurred among adult men and youth.
But Statistics Canada noted that the trend of Canada's labour market has been improving steadily forward since the outsized job losses of last winter.
"Since the peak in October 2008, employment has fallen 2.1 per cent (357,000), with the bulk of the decline occurring between October and march 2009," the agency noted.
"Since then, the trend in employment has levelled, with the number of employed almost the same in September as it was in March."
The biggest jobs gains came in industries that have been hardest hit by the recession. Manufacturers added 26,000 workers last month, and the construction trade, which may have been boosted by federal stimulus money, picked up 25,000 workers, the second consecutive gain.
Workers in education services also saw improvement with 18,000 jobs added to the sector last month, when students returned to schools, colleges and universities following the summer break.
Meanwhile, employment in transportation and warehousing slipped by 21,000.
Regionally, British Columbia, New Brunswick and Prince Edward Island saw significant job gains in September.
Nova Scotia, Quebec and Manitoba saw outright job losses.
Canada's national unemployment rate was 8.4 per cent in September. Statistics Canada also released seasonally adjusted, three-month moving average unemployment rates for major cities but cautions the figures may fluctuate widely because they are based on small statistical samples. (Previous month in brackets.)
-St. John's, N.L. 8.6 (8.2)
-Halifax 6.6 (6.4)
-Saint John, N.B. 5.5 (5.2)
-Saguenay, Que. 9.0 (9.3)
-Quebec 5.5 (5.1)
-Trois-Rivieres, Que. 9.1 (8.6)
-Sherbrooke, Que. 7.0 (7.6)
-Montreal 9.5 (9.6)
-Gatineau, Que. 5.8 (5.8)
-Ottawa 4.8 (5.2)
-Kingston, Ont. 6.9 (6.8)
-Toronto 9.8 (10.1)
-Hamilton 9.1 (8.7)
-Kitchener, Ont. 9.3 (9.9)
-London, Ont. 11.2 (11.1)
-Oshawa, Ont. 9.2 (9.9)
-St. Catharines-Niagara, Ont. 9.9 (9.9)
-Sudbury, Ont. 10.5 (10.6)
-Thunder Bay, Ont. 8.5 (8.7)
-Windsor, Ont. 14.3 (14.8)
-Winnipeg 5.8 (5.8)
-Regina 4.6 (4.1)
-Saskatoon 4.5 (4.5)
-Calgary 6.9 (7.1)
-Edmonton 7.4 (7.3)
-Abbotsford, B.C. 8.9 (9.0)
-Vancouver 7.1 (7.3)
-Victoria 6.1 (5.7)
Canada's national unemployment rate was 8.4 per cent in September. Here's what happened provincially (previous month in brackets):
-Newfoundland 15.3 (15.6)
-Prince Edward Island 11.8 (13.7)
-Nova Scotia 9.5 (9.5)
-New Brunswick 8.1 (9.3)
-Quebec 8.8 (9.1)
-Ontario 9.2 (9.4)
-Manitoba 5.3 (5.7)
-Saskatchewan 4.6 (5.0)
-Alberta 7.1 (7.4)
-British Columbia 7.4 (7.8)
A quick look at September unemployment (previous month in brackets):
Unemployment rate: 8.4 per cent (8.7)
Number unemployed: 1,549,700 (1,604,900)
Number working: 16,838,000 (16,807,400)
Youth (15-24 years) unemployment: 15.1 (16.3)
Men (25 plus) unemployment: 8.3 per cent (8.4)
Women (25 plus) unemployment: 6.0 per cent (6.1)
Friday, 9 October 2009
Canada's unemployment rate falls for first time since recession
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