Canada’s job market is recovering from several lockdowns

In June, the national job market showed better than expected results, partially offsetting the previous losses caused by lockdowns earlier this year.

According to Statistics Canada, the economy created 230,700 positions last month, while economists predicted only 175,000. Such results followed the loss of 275,000 jobs reported in April and May, when the governments shut down certain sectors of the economy in order to fight the third wave of COVID-19.

June performance is one more sign of an imminent economic boom. It shows that companies are ready to hire people again, as the restrictions are eased or even lifted. The numbers also strengthen forecasts that the central bank will keep reducing its monetary support at its next meeting on July 14.

“It’s the recent piece of evidence that the national economy is recovering from the third wave, leaving almost no reasons for the Bank of Canada not to reduce its stimulus”, – says Benjamin Reitzes from BMO Capital Markets.

Last month, Canada’s unemployment rate was down from 8.2% to 7.8%.

However, there was also a weak point in the report, as all increases were seen in the segment of part-time employment, while full-time jobs saw the third consecutive monthly decline. That’s why total hours worked fell by 0.2% even in spite of the overall employment growth.

The Canadian economy added 263,900 part-time jobs last month, but full-time employment was down by 33,200.

This report is the last significant piece of economic data before the BoC’s next rate meeting. The Bank is one of the first from advanced economies to start reducing the monetary stimulus. It has already cut its weekly purchases of Canadian government bonds from last year’s $5 billion to the current $3 billion.

Moreover, analysts expect this number to go down to $2 billion next week, before falling to about $1 billion by the end of 2021 or the beginning of 2022. Markets also predict at least one interest rate during the next 12 months.