Canada’s job market returns to its pre-pandemic level
Last month, the national economy has recovered about three million jobs that were lost because of the COVID-19 pandemic.
According to Statistics Canada, in September, Canada created 157,100 new jobs, bringing the labor market back to its pre-pandemic levels. Meanwhile, economists polled by Bloomberg, expected only 60,000 new positions.
The jobless rate went down from 7.1% in August to 6.9% last month. The number of hours worked rose by 1.1%, but was still 1.5% below the pre-pandemic level.
The strong results are a great sign for the national economy. In addition to it, they will also strengthen forecasts from Bank of Canada officials that the economy will show a strong recovery following declines seen earlier this year because of the third wave of COVID and business restrictions.
Such a report also supports the expectation that the Bank of Canada will reduce its weekly purchases of Canadian government bonds from $2 billion to $1 billion this month.
Moreover, the U.S. reported weaker-than-expected job results, with employment growing by 194,000, which is almost half of what economists had predicted. The numbers make it more difficult for the Federal Reserve to stick to its plan on reducing monetary support before the end of 2021.
The main driver of Canada’s job growth was a full-time sector, while part-time employment was down slightly. The largest gains were seen in the sectors of public administration, information culture and recreation. Approximately 139,000 people entered the labor force last month, taking the participation rate to 65.5%, which is the largest number since the start of the pandemic.
At the same time, we can see troubling signs that many unemployed people are left behind, even amid the expanding job market. The number of long-term unemployed Canadians (those who don’t have a job for at least 27 consecutive weeks, or almost six months) is now twice what it was before the pandemic (389,000). It’s more than a quarter of everyone without a job in the country.
According to Leah Nord with the Canadian Chamber of Commerce it’s a bad sign.
“It’s important to celebrate the gains we’ve seen in employment numbers last month, but we also can’t forget about these numbers”, – she noted. “Amid a mass labour shortage, 27.3% of unemployed Canadians are missing. Where did they go?”
“Canadians do want to work. Most remain unemployed not by their choice. We need to find out what really holds them back from entering the labor force and make the right decisions. The recovery of Canada’s entire economy depends on it.”