Canada: Employment report a mix of good and less good news - NBF
According to National Bank of Canada’s analysts, Krishen Rangasamy the outlook for employment remains positive following the release of the February jobs report that was “a mix of good and less good news”.
Key Quotes:
“Canadian employment rose 15K in February according to the Labour Force survey, not far from consensus expectations. With the participation rate unchanged at 65.5%, the job gains allowed the unemployment rate to fall one tick from 5.9% to 5.8%. There were job increases in both public (+50K) and private sectors (+8K), which dwarfed the 43K decline in the ranks of the self-employeds.”
“Services-producing industries increased employment by 26K thanks to gains in health care, education and public admin which more than offset losses in finance, trade and professional services. Full-time employment was down 39K, offsetting gains of 55K for part-timers. Hourly earnings were up 3.1% year-on-year.”
“The February employment report was a mix of good and less good news. While the overall job gains are welcome, the tilt towards part-timers and the public sector wasn’t particularly encouraging. Softness in the private sector and weakness in cyclical industries such as manufacturing and construction were also disappointing.”
“This survey can be volatile and hence should be viewed through a longer time frame. In that regard, a 12-month average of 24K jobs/month, mostly paid full-time jobs, points to a more than decent labour market. Year-on-year hourly earnings remain near two-year highs, reflecting a tightening labour market.”
“Despite mounting inflation pressures, the Bank of Canada has made it clear it is in no rush to move on rates because of uncertainties related to trade and the economy’s sensitivity to earlier rate hikes. The outlook for employment remains positive with corporations reporting strong profits and labour shortages, although the pace of job growth is likely to be restrained until at least a revamped NAFTA is signed by policymakers.”