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The Unemployment Rate Dives Lower in Canada

Posted Friday, March 12, 2021 by
Skerdian Meta • 1 min read

Employment heading to pre-covid levels

The unemployment rate jumped higher in Canada, reaching 13.7% in June last year, as it did all over the world due to the lock-downs. But, while in the rest of the world employment improved in the second half of 2020, in Canada the unemployment rate remained high.

In December and January we even saw an increase in unemployment, but today’s report showed a big decline for February, which took the unemployment rate to 8.2%, while employment surged by nearly 260K. This is a positive move int he right direction, indicating that spring will be blooming in Canada.

Canada February Employment Report

February employment +259.2K vs +75.0K expected
January employment was -212.8K
Full time +88.2K vs +12.6K prior
Part time +171.0K vs -225.4K prior
Unemployment rate 8.2% vs 9.2% expected (9.4% prior)
Participation rate 64.7% vs 64.7% prior
Hourly wage rate YoY for permanent employees +4.3% vs 5.1% expected
Prior wage rate +5.9%
Long term unemployed -49K
Retail jobs +122K
Accommodation and food services +65K
Total hours worked +1.4%
Total hours worked YoY -3.2% y/y
Full report

That is a stunningly strong number. In particular, the drop in unemployment with a flat participation rate. There was some reopening in February and Canada’s wage subsidy programs did a good job of keeping workers attached to jobs. Evidently businesses are feeling good enough to get employees right back on the job. On net, 266K jobs were lost in the prior two months and 259K were added back.

Market expectations of a Bank of Canada rate hike are moving up quickly and USD/CAD fell to 1.2511 on this. As you can see, these were mostly low paying jobs. Statistics Canada said jobs were concentrated in those paying $17.50/hour or less and that shows up in the drop in wages.

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