In a promising sign for Canadian economic recovery hopes, the latest employment numbers, released by Statistics Canada on Friday, were significantly better than any jobs data estimates put forward by analysts.
With the large increase in employment levels being witnessed, gross employment numbers are closing in on their pre-pandemic levels. The current unemployment rate of 9% now puts the gross count of employed persons to within 720,000 of pre-pandemic levels.
Employment change more than double analysts expectations
Ahead of the survey’s release, analysts were expecting employment growth to be a little over 150,000 new jobs—a figure in line with the slowly declining trend set over the previous few months’ data. The actual numbers delivered, however, were not only more than double the estimates, but they reversed the declining trend in employment recovery.
With the total number of additional jobs in September sitting at 378,200, the data beats last month’s jobs growth of 245,800 by approximately 54%. What’s more encouraging is the breakdown of this data into its full-time and part-time components, showing that much of the recovery is being driven by a return to full-time employment.
Compared to last month’s figures, growth in full-time jobs was 62% up over last month’s figure of 205,800 with the total full-time jobs created this month being 334,000. Growth in part-time positions, on the other hand, only increased by 10%, with 44,000 new positions created this month compared to 40,000 last month.
Accommodation and food services show biggest jobs growth while retail declines
Leading the recovery in job numbers in September was the accommodation and food services sector, with a total of 71,900 new positions being created over the month. The information, culture and recreation positions also rose strongly, seeing a bump of 56,100. The bounceback in these sectors is a good sign that a recovery in the Canadian economy is underway as confidence returns to these industries which were amongst those hardest hit by the crisis.
On a slightly negative note, growth in retail positions was negative, showing there is still some way to go on the recovery journey for this sector. In total, 2,000 positions were lost over the course of the month of September. Adding to its problems, the shift to e-commerce throughout the crisis may well have a long-lasting effect on the shopping habits of consumers.
Markets react positively to the jobs data news
With the release of the better than expected jobs data, the S&P/TSX Composite Index traded immediately higher on the market open, beginning the day 50 points up 15,584 before hitting a morning session high of 16,611.
The trading that followed for the rest of the day was rocky, however, indicating that even in the face of positive data, much uncertainty still lies ahead for the Canadian economy.
We’re not out of the COVID-19 woods yet
While things are certainly looking up for the economy, especially in the light of the September jobs data, there still lies a long road to recovery ahead. When employment rates will return to pre-pandemic levels remains a big unknown. Given how wrong analysts were with estimating the most recent round of data, it’s evident that making predictions in this climate is nigh on impossible.
Adding to the uncertainty is that this is a global crisis, meaning that domestic recovery can never be entirely decoupled from the global situation. With many unknowns still ahead, like the approval and rollout of a vaccine, the U.S. presidential election, etc., all we can do is take a momentary breather and enjoy the good news day.
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