Canada adds 60,900 jobs, easing fears of recession
Ottawa: Canada's economy added the most jobs in eight months in September, led by hiring at schools, bringing the country's jobless rate to its lowest since 2008 and adding to evidence the country is averting a new recession.
Employment rose by 60,900 after a decline of 5,500 in August, Statistics Canada said Friday in Ottawa. The unemployment rate fell to 7.1 per cent, its lowest since December 2008. Bloomberg News surveys called for a job gain of 15,000 and unemployment to remain at 7.3 per cent.
The rise marks a recovery for the country's labour market after the economy added a net 1,600 workers in the previous two months, bringing the average monthly gain in the third quarter to 20,833. The world's 10th-largest economy shrank in the second quarter, two years after its last recession.
"It helps to allay some of those fears that Canada does get dragged down into a recession," said David Tulk, chief macro strategist for Canada at Toronto-Dominion Bank's TD Securities unit in Toronto. "This helps to maybe force the market to reconsider its current pricing of Bank of Canada cuts."
Two-year government bond yields rose three basis points to 0.97 per cent in Toronto on Friday. The Canadian currency fell 0.2 per cent to C$1.0392 per US dollar from C$1.0371 Thursday. It touched C$1.0658 on October 4, the weakest level since August 2010. One Canadian dollar buys 96.23 US cents.
Growth prospects
Finance Minister Jim Flaherty said in an e-mailed statement yesterday the jobs data reflect the country's growth prospects.
"September's job growth shows Canada is on the right track for steady, modest job creation and economic growth," Flaherty said in the statement. He also said the unemployment rate still remains too high.
The jobs report is the last before the Bank of Canada's next interest-rate decision on October 25. The central bank has held its key rate at 1 per cent since September 2010, and Senior Deputy Governor Tiff Macklem said in a September 27 speech policymakers would be "prudent" with interest-rate increases during a slow economic rebound threatened by weak US demand and Europe's debt crisis.
Some investors are betting the central bank's next move will be a cut. The three-month overnight index swap rate, which is based on what investors expect the central bank's rate will average during that period, rose to 0.936 per cent, from 0.934 per cent Friday. That's below the central bank's 1 per cent target for overnight loans between banks. It traded as low as .908 per cent earlier this week.
Headwinds
Friday's jobs report also highlights some of the "headwinds" faced by the economy, Tulk said. Half of the 16 industries tracked by Statistics Canada recorded declines, which were offset by boost from a "statistical quirk" in the data for education services.
The monthly gain was led by 38,400 new jobs in education services, and a 35,600 increase for professional and scientific services. Public sector jobs rose 36,900, while employment in the private sector was down 14,900.
Employers recorded the lowest quarterly job gain over the past three months since the fourth quarter of 2010.
The report was "better than expected for sure, and I'll take that," said Stewart Hall, a currency strategist at RBC Dominion Securities in Toronto.
"But a game changer? I don't think so."
The finance, insurance, real estate and leasing industries saw 35,300 jobs lost in the month. Construction companies added 11,600 new jobs during the month, while natural resources firms hired 17,100 workers.
Canada's jobless rate has been below the US since October 2008. The Labour Department in Washington Friday reported payrolls climbed by 103,000 workers in September, compared with a median forecast of 60,000 in a Bloomberg News survey.
In Canada, full-time employment rose by 63,800 in September, while part-time jobs fell by 2,900.
Canadian average hourly wages rose 1.5 per cent in September from a year earlier, the report said. Wages rose at a 1.4 per cent pace in July and August, the slowest June 2003.
http://gulfnews.com/business/economy/canada-adds-60-900-jobs-easing-fears-of-recession-1.887995
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