Canada Jobless Rate Falls to 7.6% as Youth Quit Workforce, Employers Hire
Canada’s jobless rate fell in November to the lowest since January 2009, as employment increased and young people left the labor force.
The jobless rate declined to 7.6 percent last month from 7.9 percent in October, and employment rose by 15,200 after an increase of 3,000 in October, Statistics Canada said today in Ottawa. Economists forecast a 7.9 percent unemployment rate and job growth of 19,800, according to the median estimates of 25 and 24 economists surveyed by Bloomberg News, respectively.
The employment gain was less than half the 40,400 people aged 15 to 24 who left the workforce, the report said. The youth participation rate dropped to 63.2 percent, the lowest since August 1999, from 64.1 percent last month.
“It’s a very fragmented report and there are few places in it that would give us any reason to celebrate,” said Sebastien Lavoie, an economist at Laurentian Bank Securities in Montreal. “The drop in the unemployment rate comes from youth that have stopped looking for work to focus on their studies.”
The November report confirms a trend toward slowing job growth seen since September, so there is no urgency for Bank of Canada to raise its benchmark lending rate, Lavoie also said. Economic growth slowed to a 1 percent annualized pace in the third quarter, Statistics Canada said earlier this week, less than the central bank’s 1.6 percent prediction.
Holding Interest Rates
The central bank has raised its overnight target rate three times this year to 1 percent and economists surveyed by Bloomberg News said it will keep it there until at least the third quarter of 2011, based on the median of 23 estimates.
The Canadian dollar pared gains after the report damped speculation about future interest-rate increases. The Canadian currency depreciated 0.1 percent to C$1.0041 per U.S. dollar at 10:06 a.m. in Toronto, after earlier trading at C$1.0003, from C$1.0026 yesterday. One Canadian dollar buys 99.59 U.S. cents.
Full-time employment fell by 11,500 and part-time jobs rose by 26,700, Statistics Canada said.
Private companies shrank their payrolls by 11,500 and public sector employment rose by 21,100, Statistics Canada said.
“The details are a little bit softer than the headline would suggest,” said Mark Chandler, head of Canadian fixed income and currency strategy at Royal Bank of Canada in Toronto. “You could almost put the unemployment rate to one side” because of the youth figures and declines in full-time and private employment, he said.
Speaking to reporters in Montreal, Finance Minister Jim Flaherty said the report was encouraging, adding that Canadian economic growth is moderating.
Health care and social assistance workers led the November job gain with 28,400 new positions, followed by 26,200 jobs in retail and wholesale trade.
Manufacturing employment fell by 28,600, reducing its share of total employment to 10 percent, the lowest in figures dating back to 1976, Statistics Canada said. The industry’s share of total employment was 15 percent “in the early 2000s and 19 percent in 1976,” the report said.
Payroll employment increased by 9,700 positions in November. Self-employment rose by 5,700.
Average hourly wages advanced 2.2 percent in November from a year earlier, faster than October’s 2.1 percent pace.
In the U.S., payrolls increased 39,000, less than the most pessimistic projection of economists surveyed by Bloomberg News, after a revised 172,000 increase the prior month, Labor Department figures showed today in Washington. The jobless rate rose to 9.8 percent, the highest since April.