Canada employment data -- what's not to like?

Canada's monthly employment data are notoriously volatile and the analysts' consensus expectation is regularly way off the mark. Even so, the discrepancy between the consensus and the actual figures has rarely been more marked than today. The expectation for the February report was for the addition of 75,000 jobs, dropping the unemployment rate a couple of ticks to 9.2 percent. The actual outcome, per Statistics Canada: the economy added 259,000 jobs in the month and the unemployment rate fell to 8.2 percent, its lowest level since March 2020.

Even if you pick away at the details of the data, it's hard to find much to lessen the impact of the headline number.  The overall job gains almost entirely offset the weakness seen in the two preceding months, when 266,000 jobs were lost. Part-time positions accounted for 171,000 of the positions added in February, but it's important to note two things here. First, since the bulk of the jobs lost as a result of pandemic-related lockdowns have been part time in nature, it's only to be expected that such positions will account for the bulk of the rebound as those restrictions are eased. Second, there were in fact 88,000 full time positions created in the month, which would represent a very strong report in its own right.

There has been some grumbling in sections of the media that the public sector has been shielded from the worst effects of the pandemic. This may be true, though it is hard to see who would have been helped if tens of thousands of public servants had been furloughed. In any case, today's numbers evidence a strong rebound in the private sector, which accounted for 226,000 of the new jobs created. 

The regional pattern is similarly encouraging. Only Newfoundland and Labrador posted job losses, and there were gains in excess of 100,000 in both Ontario and Quebec. Smaller gains were also reported in Alberta, BC and Manitoba, meaning that all five of Canada's most populous Provinces reported some job gains in the month. 

If there is anything not to like about this report, it lies in the fact that the employment market has till not regained its pre-pandemic levels. There are still 599,000 or 3.1 percent fewer people working in Canada than was the case in February 2020. Then again, the labour force underutilization rate continues to improve, falling to 16.6 percent in the month, its lowest level since February 2020.

What happens next? It is interesting to note that the strongest job gains in February were reported in Quebec, which began relaxing restrictions ahead of the rest of the country. Most other Provinces have now followed suit, suggesting that a similar effect will be seen across the country in the March data. There are fears that the emergence of COVID "Variants of Concern"* may trigger a third wave of the pandemic, but as the survey week for the March data is just about to begin, that is an issue for a future date.  The March report looks certain to be strong: it will be interesting to see if the analysts consensus is closer to the mark this time. 

* A great name for a rock band!