Canada Labour Market Surpasses Expectations as Unemployment Rate Falls to 9%

Canada’s labour market appears to be carrying over summer job gains well into September, surpassing economists’ forecasts by nearly double.

According to the latest data released by Statistics Canada, the Canadian economy added an additional 378,200 jobs during the month of September, which is almost twice as many jobs compared to the median forecast of 150,000. Job gains were witnessed across a broad range of industries and sectors, and nearly all provinces except for Prince Edward Island and New Brunswick. This marks an overall 2.1% increase in employment, and puts Canada’s economy only 3.7% below its pre-pandemic February levels.

Some of Canada’s hardest-hit sectors as a result of pandemic shutdowns was the accommodation and food services sector, which still remains 15.3% below pre-pandemic levels. Nonetheless, September is the fifth consecutive months of gains for that sector, as employment levels increased by 72,000, or 7.4%.

According to Statistics Canada, the accommodation and food services industry is likely going to face additional challenges as outdoor dining subsides into the fall and winter season, while some provincial governments reintroduce COVID-19 restrictions. In the meantime, employment levels in education experienced a significant increase of 5% in September, and even surpassed pre-pandemic levels. This is due to many jurisdictions across Canada increasing staffing levels to better cope with coronavirus supports.

The unemployment rate also fell to 9%, which is 1.2% lower than the August rate of 10.2%, and is the fourth consecutive month of declines. There were a total of 1.8 million unemployed people across Canada in September, which is 10.5% lower than the prior month. Moreover, the unemployment rate is optimistically inching further away from its COVID-19 induced peak of 13.7% in May. Comparatively, the 2008/2009 recession unemployment rate peaked at 8.7%, and then took more than 9 years to rebound to its pre-recession rate.

Information for this briefing was found via Statistics Canada. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.

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