Canada’s Jobs Market Surprises Again With Monster Gain

(Bloomberg) --

Canada recorded one of its best months of job gains on record in August, a surprising show of strength by a labor market that has relentlessly powered the nation’s expansion.

The economy added 81,100 jobs last month, Statistics Canada said Friday in Ottawa, versus expectations for a gain of about 20,000. It’s the seventh largest monthly gain in records going back to 1976. Canada has now added 471,300 jobs over the past 12 months, the most in a year since 2003.

Friday’s jobs report will only reaffirm expectations at the Bank of Canada that the nation’s economy has developed a certain amount of resilience to global trade headwinds, giving the central bank ammunition to buck the global easing trend. For one, the gain in August should ease worries about the extent of any slowdown in the second half of this year.

“If the Bank of Canada was on the fence about cutting rates in October, today’s jobs numbers might be one further push towards standing pat,” Avery Shenfeld, chief economist at CIBC World Markets, said in a note to investors.

The Canadian dollar jumped 0.3% to C$1.31897 per U.S. dollar at 8:39 a.m. in Toronto. The currency has gained almost a full cent since Wednesday, when the Bank of Canada began to downplay the likelihood it is poised to cut interest rates soon.

Swaps trading suggests markets have pushed back expectations for the next rate cut to as late as April, from the December cut expected earlier this week.

The strong jobs market is being fed by new workers. That’s a good sign, suggesting there is a reserve of available workers that employers can tap. That should help temper any overheating risks and raise confidence the jobs rally has more room to run.

As a result, the unemployment rate was unchanged at 5.7% in August, as much of the employment gain reflected a surge in new entrants to the labor force.

Get More

• Wage gains slowed but remained strong. Hourly pay was up 3.7% in August from a year earlier. While that’s down from 4.5% in July, it’s still well above average in recent years. Permanent worker pay slowed to an annual pace of 3.8%
• Total hours worked in August were up 1.2% from a year earlier, compared to 0.7% annual pace in July
• The economy added 23,800 full-time jobs in August, while part- time employment increased by 57,200.
• The number of people employed by private sector companies surged 94,300, more than reversing a drop the previous month
• The employment gain last month was largely in services, which recorded a 73,300 increase

©2019 Bloomberg L.P.