Canada´s jobless rate surprisingly fell to a 33-year low of 5.9 per cent last month after employers added 51,100 jobs. Wages are rising at the fastest pace in at least a decade and labour shortages - not tightening credit conditions - are what´s most worrying executives.
Yesterday´s Statistics Canada report, followed by the Bank of Canada´s quarterly business outlook survey, paint a picture of an economy that´s unfazed by credit woes or a U.S. slowdown.
"If you landed here from Mars and you were shown these reports, you wouldn´t believe it was occurring in the midst of a crisis in the credit markets. It´s quite remarkable," said Patricia Croft, chief economist at Phillips, Hager & North.
The reports snuffed the odds of any interest rate cut and sent the Canadian dollar on another flight, ending up 1.59 cents at 101.85 cents (U.S.).
Most of last month´s hiring binge was in full-time jobs, which rose at the fastest pace in four months.
Ontario accounted for almost 30,000 of September´s job gains, spurred by hiring for the Oct. 10 provincial election.
If there is any weak spot, it´s that most of this year´s new jobs are in the public, not private, sector. Public-sector jobs have risen 4.5 per cent in the past year, spurred by a string of hefty government surpluses, far more than the 1.2-per-cent gain in private-sector jobs.
Public administration, health care and social assistance, along with utilities, account for most of the gains.
"These are government-funded jobs," said Vincent Ferrao, Statscan´s labour market analyst.
September was no exception, with 59,000 jobs in the public sector, compared with just 7,400 in the private sector.
Education was the main driver in the month and has expanded all year long. The reason may be the move to smaller class sizes, a policy shift that´s happening across the country, said Myles Ellis, director of economic services at the Canadian Teachers´ Federation.
Wages are jumping as the labour market tightens. Hourly earnings rose 4.2 per cent from a year ago, much hotter than the 1.7-per-cent inflation rate and the biggest increase since Statscan began collecting this data in 1997.
Job creation "along with steady upward wage pressures will keep the Bank of Canada firmly on hold through the end of this year, if not even longer," Douglas Porter, deputy chief economist at Bank of Montreal, said in a note.
The tightening in the credit market hasn´t rattled executives´ views on the economy, nor on hiring plans. The Bank of Canada´s autumn business outlook survey showed few businesses think tighter credit conditions will hurt their sales or investment.
"Businesses continue to be positive about the economic outlook, notwithstanding lower expectations for U.S. economic growth and recent financial market turbulence," the central bank said.
Instead, many are preoccupied with capacity constraints, particularly labour shortages.
More than half of Canadian companies - 54 per cent - say they would have problems meeting an unexpected increase in demand, a level well above the historical average. The challenge remains most acute in the West, and the main reason is still labour shortages.
Labour shortages are most severe in British Columbia and the Prairies. About 41 per cent of all Canadian firms say the issue is hurting their ability to meet demand.
"This is a major challenge for businesses," Ms. Croft said.
Executives speak
The Bank of Canada´s quarterly survey, conducted between mid-August and mid-September, gave a snapshot of how Canadian executives feel about the credit squeeze, rising dollar and capacity constraints.
45 per cent
Firms that expect to add to payrolls over the next year, particularly those in the West, a level that´s little changed from the bank´s previous survey.
35 per cent
Still expect year-over-year sales to increase, down a smidge from the last survey. In Western Canada, weaker activity in the natural gas sector is weighing on the outlook.
41 per cent
Say they´re facing labour shortages that are affecting their ability to meet demand, especially those in British Columbia and the Prairies.
80 per cent
Expect the rate of inflation will remain in the Bank of Canada´s comfort zone of between 1 and 3 per cent over the next two years.
Canadian wages on the rise
By Sunny Freeman
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Fri, Aug 27 2010
Canadians have been bringing home more money each week than they did during the economic downturn, when jobs and workers´ hours were slashed, but economists warn a return to recession in the United States could derail rising incomes.
Unemployment hits 15-year high in Ontario
By Madhavi Acharya, Tom Yew, Rita Trichur
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Sat, Jun 6 2009
Overall, Ontario was walloped by a net loss of 60,000 positions, bringing the province´s running tally of employment losses to 234,000 since the labour market peaked last October.
Employment insurance numbers jumped 10% in March
By CBC News
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Tue, May 26 2009
The number of Canadians collecting regular employment insurance benefits grew by 65,300, or more than 10 per cent, in March, marking the biggest monthly increase since the job market began to deteriorate in October.
Rising Gas Prices Guzzle Take-Home Pay
By Maura Pallera, Salary.com
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Thu, Aug 14 2008
This summer, Americans were paying, on average, $4.09 per gallon for regular unleaded gasoline to fuel the vehicles they rely on to get to and from work everyday. This represents an increase of $1.14 over the same time last year.
Immigrant employment rising, StatsCan report says
By Eric Beauchesne, Canwest News Service
|
Wed, May 14 2008
OTTAWA - Immigrant employment, seen as a way to offset projected labour shortages, increased sharply last year in Canada, easily outpacing that of native-born workers, Statistics Canada reported Tuesday.
