Economists agree that the reports are good news — but they are also quick to serve up a big dose of caution.
“It’s certainly stronger than expected but I’m wary of this strength being sustained,” said Paul Ferley, assistant chief economist at the Royal Bank of Canada’s RBC Economics.
“That said, it eases some concern of a stalling in hiring in Canada.”
Canada’s economy added a whopping 52,100 new jobs in September — that’s five times more than economists expected. Most were full-time positions.
It was the third-biggest gain so far this year and comes after a big gain of 34,000 jobs in August.
But, in another surprise, the jobless rate actually edged up by one-tenth of a percentage point to 7.4 per cent as more Canadians joined the labour force.
“That is very unusual, to get a job gain of more than 50,000 and yet have the unemployment rate rise in the same month,” said Doug Porter, deputy chief economist at the Bank of Montreal’s BMO Capital Markets.
“Often when the job market looks a bit better, you can get a rush of people out there looking for work. I don’t think that’s a bad sign. The good news here is the majority of people looking for work got jobs.”
In the U.S., the healthy jobs report pushed the unemployment rate down to 7.8 per cent from 8.1 per cent. That’s its lowest level since January, 2009, an unexpected decline that is sure to be a boon to the re-election campaign of President Barack Obama.
With the private sector leading the charge, employers added 114,000 jobs last month, the U.S. Labor Department said Friday. As well, gains for July and August were revised upward, dispelling previous reports that job creation took the summer off.
The latest U.S. labour market report comes on the heels of positive data on the housing market and manufacturing — all of which bodes well for the U.S. and Canada.
“I am more encouraged about the fourth quarter because we’ve had a run of good news about the U.S. That’s exactly what the Canadian economy needs at this point,” Porter said.
“There isn’t a lot of room for consumer spending to grow. The housing market looks as though it’s starting to soften. Governments are restraining their spending, businesses are understandably cautious. That really only leaves exports and exports need the U.S. economy to get going.”
But that doesn’t mean it’s clear sailing from here, either.
A sense of uncertainty still permeates the world economy — from the U.S. election (and debt-ceiling battles) to the European sovereign debt crisis to China’s slowing economy.
“There’s uncertainty about whether the global recovery will be sustained,” Ferley said.
In Canada, September’s increase brought year-over-year job creation to 175,000.
The vast majority were full-time and all in the private sector, although roughly two-thirds were in the self-employed category — jobs that economists say are often lower-paying and less productive.
Statistics Canada said most of the new jobs were taken by workers in the core 25-54 age group, and mostly by men in the first notable increase in employment by men since March of last year.
Regionally, most of the action occurred in Ontario, which saw an increase of 31,600 jobs. Quebec and Manitoba also saw gains.
Statistics Canada said the biggest gains occurred in the retail and wholesale trade sectors, which saw some 34,000 jobs created. The number of construction jobs rose by 29,000, which has been weak in recent months.
Work in the information, culture and recreation industries saw an increase of about 24,000, and there were about 8,700 new agriculture jobs in the month.
Detracting from the positives were the loss of 19,000 workers in a general category called other services, and a 17,000 decrease in business, building and other support services.
Original Article
Source: the star
Author: Madhavi Acharya-Tom Yew
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