Americas

VIEW Canada reports bumper job gain, unemployment rate dips to 6.0%

4 minute read
Register now for FREE unlimited access to Reuters.com

TORONTO, Dec 3 (Reuters) - The Canadian economy added a net 153,700 jobs in November, beating expectations, and the jobless rate slipped to 6.0% from 6.7% in October, Statistics Canada said on Friday.

Economists polled by Reuters had predicted a gain of 35,000 jobs in November and for the unemployment rate to fall to 6.6%. STORIES: read more

Market reaction: CAD/

Register now for FREE unlimited access to Reuters.com

Link:https://www150.statcan.gc.ca/n1/daily-quotidien/211203/dq211203a-eng.htm

COMMENTARY

LEAH NORD, SENIOR DIRECTOR OF WORKFORCE STRATEGIES AND INCLUSIVE GROWTH AT THE CANADIAN CHAMBER OF COMMERCE:

"Now clear of the impacts of support programs, our labour market's structural problem is laid bare: an entrenched misalignment between the skills employers are looking for and job seekers are offering."

"With 1 million vacancies and 1.2 million unemployed and no means of meaningfully connecting the two, we are no better off today than where we were before the pandemic. Looking forward, we know between 33% and 55% of businesses are planning to hire in the next few months and expect significant challenges in doing so. Are labour market pains are about to go from bad to worse through early 2022.

"Without labour productivity increasing, our economic recovery from the impacts of COVID-19 lockdowns will be suppressed, if not completely stalled. At the same time, a tight labour market will continue to see wage growth push inflation higher, with a multitude of negative effects. We should all be concerned there's no end in sight for this labour market failure."

DEREK HOLT, VICE PRESIDENT OF CAPITAL MARKETS ECONOMICS AT SCOTIABANK

"I think the job market is tighter than the Bank of Canada has been letting on. One indication of that is, in part coming through the wages side of the picture in Canada. And that was price signals, maybe revealing something about the extent to which the labor market has tightened up, and that's backed up by the full recovery and then some in jobs."

"We're 186,000 jobs above pre-pandemic levels. So the Bank of Canada's narrative that we still have runway, in terms of a labor market recovery, is looking weaker by the moment. I think next week's (BoC) statements will probably be a little bit guarded. I would expect them to be short and sweet and flag that growth is tracking broadly in line with our expectations. But we have some hiccups along the way now with B.C. flooding and with Omicron. Generally speaking, I'd expect a hint of cautious optimism. And they'll probably say, we'll see you in January with revised forecasts. And so I think at that point in time, it's going to look more seriously at a Q2 hike."

"Next week the most prudent course of action until we have more information on things like Omicron will probably be to just buy time until they have fresh forecasts, at the end of January meeting. So by then we should have more information on some of the evolving elements.

ROYCE MENDES, SENIOR ECONOMIST, CIBC CAPITAL MARKETS

"The jobs gain suggests that, even if GDP isn't near its prior trend, labour markets are tightening sharply, and that positions the Bank of Canada to hike earlier than we had expected, although the impact of Omicron is of course still creating a significant degree of uncertainty to any such forecasts."

DOUG PORTER, CHIEF ECONOMIST, BMO CAPITAL MARKETS

"It held the potential for a much bigger surprise than normal because there were a lot of moving parts here ... But there was no uncertainty which side these data line up. Very strong virtually across the board as far as I can see."

"If we didn't have the variant bringing some uncertainty over the outlook, I think it would be almost all systems go for the Bank (of Canada) to start teeing up tightening reasonably early in 2022."

Register now for FREE unlimited access to Reuters.com
Reporting by Fergal Smith and Steve Scherer Editing by Denny Thomas

Our Standards: The Thomson Reuters Trust Principles.

More from Reuters