| Consensus | Actual | Previous | |
|---|---|---|---|
| Employment - M/M | 10,000 | 21,800 | 150,000 |
| Unemployment Rate | 5.1% | 5.0% | 5.0% |
Highlights
Canada's labour market remained tighter than expected in February, when the economy added 21,800 jobs, leaving the unemployment rate unchanged at 5.0 percent, while Econoday's consensus forecasts were 10,000 and 5.1 percent, respectively. The participation rate remained stable at 65.7 percent.
Job gains were concentrated in private sector full-time employment. The economy added 31,100 full-time positions in February, while part-time jobs were down 9,300. Private-sector employment was up 38,500, while it fell 7,900 in the public sector. Self-employment declined 8,900.
More worrisome were the 5.4 percent year-over-year average hourly wage gains compared with 4.5 percent in January.
Total hours worked rose 0.6 percent in February and 1.4 percent on a year-over-year basis.
Looking at the industry breakdown, employment increased 17,500 in goods-producing industries and a more modest 4,200 in services.
Utilities (7,500), manufacturing (6,800) and natural resources (5,000) far exceeded declines elsewhere, including construction amid higher financing costs. Within services, the picture was more mixed, with gains in five industries offsetting declines in the other six. Health care and social assistance, public administration, other services, and transportation and warehousing added a cumulative 39,900 jobs. Business, building and other support services, finance, insurance, real estate, rental and leasing, information culture and recreation and educational services led the declines.
Regionally, employment increased in four provinces: Prince Edward Island, Newfoundland and Labrador, New Brunswick and Manitoba.
Earlier this week, the Bank of Canada already stressed the stubbornly tight labour market conditions, and today's report should only encourage its vigilance. For now, however, the central bank continues to expect slowing growth over the next two quarters to ease pressures in the labour market.
Following today's data, Econoday Consensus Divergence Index indicates an economic performance in line with expectations.
Job gains were concentrated in private sector full-time employment. The economy added 31,100 full-time positions in February, while part-time jobs were down 9,300. Private-sector employment was up 38,500, while it fell 7,900 in the public sector. Self-employment declined 8,900.
More worrisome were the 5.4 percent year-over-year average hourly wage gains compared with 4.5 percent in January.
Total hours worked rose 0.6 percent in February and 1.4 percent on a year-over-year basis.
Looking at the industry breakdown, employment increased 17,500 in goods-producing industries and a more modest 4,200 in services.
Utilities (7,500), manufacturing (6,800) and natural resources (5,000) far exceeded declines elsewhere, including construction amid higher financing costs. Within services, the picture was more mixed, with gains in five industries offsetting declines in the other six. Health care and social assistance, public administration, other services, and transportation and warehousing added a cumulative 39,900 jobs. Business, building and other support services, finance, insurance, real estate, rental and leasing, information culture and recreation and educational services led the declines.
Regionally, employment increased in four provinces: Prince Edward Island, Newfoundland and Labrador, New Brunswick and Manitoba.
Earlier this week, the Bank of Canada already stressed the stubbornly tight labour market conditions, and today's report should only encourage its vigilance. For now, however, the central bank continues to expect slowing growth over the next two quarters to ease pressures in the labour market.
Following today's data, Econoday Consensus Divergence Index indicates an economic performance in line with expectations.
Market Consensus Before Announcement
Employment in February is expected to rise 10,000 versus January's 150,000 increase and December's 104,000, both of which were far stronger than expected. February's unemployment rate is expected to rise a tenth to 5.1 percent.
Definition
The Labour Force Survey is a key economic indicator giving an overall picture of employment and unemployment. Employment counts the number of paid employees working part-time or full-time in the nation's business and government establishments. The unemployment rate measures the number of unemployed as a percentage of the labor force.
Description
As in the U.S., this report is used as an indicator of the health of the domestic economy. Employment trends and break-downs by industry groups highlight the strength in job creation and the implications for future sectoral activity. The unemployment rate is used as an indicator of tightness in labor markets and can foreshadow a future increase in wages. Labor force data provide investors with the earliest signs of industry performance. While other data are produced with a month or two delay, these data are available only a week to 10 days after the end of the latest month. Reactions can be dramatic - especially when the result is unanticipated.
The information in the report is invaluable for investors. By looking at employment trends in the various sectors, investors can take more strategic control of their portfolio. If employment in certain industries is growing, there could be investment opportunities in the firms within that industry.
The bond market will rally (fall) when the employment situation shows weakness (strength). The equity market often rallies with the bond market on weak data because low interest rates are good for stocks. But sometimes the two markets move in opposite directions. After all, a healthy labor market should be favorable for the stock market because it supports economic growth and corporate profits. At the same time, bond traders are more concerned about the potential for inflationary pressures.
The unemployment rate rises during cyclical downturns and falls during periods of rapid economic growth. A rising unemployment rate is associated with a weak or contracting economy and declining interest rates. Conversely, a decreasing unemployment rate is associated with an expanding economy and potentially rising interest rates. The fear is that wages will accelerate if the unemployment rate becomes too low and workers are hard to find.
The information in the report is invaluable for investors. By looking at employment trends in the various sectors, investors can take more strategic control of their portfolio. If employment in certain industries is growing, there could be investment opportunities in the firms within that industry.
The bond market will rally (fall) when the employment situation shows weakness (strength). The equity market often rallies with the bond market on weak data because low interest rates are good for stocks. But sometimes the two markets move in opposite directions. After all, a healthy labor market should be favorable for the stock market because it supports economic growth and corporate profits. At the same time, bond traders are more concerned about the potential for inflationary pressures.
The unemployment rate rises during cyclical downturns and falls during periods of rapid economic growth. A rising unemployment rate is associated with a weak or contracting economy and declining interest rates. Conversely, a decreasing unemployment rate is associated with an expanding economy and potentially rising interest rates. The fear is that wages will accelerate if the unemployment rate becomes too low and workers are hard to find.
