COVID-19 reopens lead to 231,000 jobs in June

Restaurant closed in shopping mall during lockdown in Toronto (Getty Images)

The Canadian economy created 231,000 jobs in June as some businesses reopened after being closed due to the COVID-19 pandemic.

It was the biggest monthly gain since March and easily exceeded estimates for a gain of 175,000 jobs. The unemployment rate fell to 7.8 percent, according to Statistics Canada.

Not surprisingly, the gains were entirely attributable to part-time work and among young people. The labor market has changed little in terms of full-time work and hours worked.

Much of the job gains came from accommodation and food services, which added 101,000 jobs. The reopening of non-essential stores has created 75,000 retail jobs.

The number of Canadians working at home fell from 400,000 to 4.7 million.

June’s gain follows a loss of 68,000 jobs in May and 275,000 in the past two months.

After falling in the previous two months, the participation rate rose 0.6 percentage points to 65.2 percent.

Labor shortages and the loonie

“While the rising participation rate should alleviate some concerns about widespread labor shortages, there are likely still pockets of the economy where labor is scarce and this could become a bigger problem. important as hiring continues in the months to come, ”said Royce, CIBC senior economist. Mendes.

“Canadian dollar is trading stronger following upside surprise.”

But the loonie’s path could change depending on the price of oil.

“The OPEC + meeting did not go as planned, as an intense clash between Saudi Arabia and the United Arab Emirates led to the collapse of the talks. A coordinated rise in production in August is unlikely to take place anymore, but individual nations should unilaterally increase supply, ”said Hector Demarco, currency strategist at Cambridge Global Payments.

“Earlier in the week, first month West Texas Intermediate prices hit $ 77 a barrel and fell below $ 74.”

Bank of Canada on track

Along with a series of interest rate cuts, the Bank of Canada has launched a massive stimulus package called Quantative Easing (QE) to help shield the economy from the economic effects of the pandemic. It has already started cutting its quantitative easing program and looks on track to continue.

“We’ll see the momentum there will be once we get into the fall.” said Benjamin Reitzes, BMO Canadian rate director and macroeconomic strategist.

“So far, this is just the latest evidence that the Canadian economy is rebounding from Wave 3, leaving little to no obstacles to another cut by the Bank of Canada at the meeting. next week’s policy. “

Jessy Bains is a senior reporter at Yahoo Finance Canada. Follow him on twitter @jessysbains.

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