A big beat and a big miss in Canadian and U.S. jobs reports
Jobs data on Friday showing the Canadian labour market’s best start since 1981 is sparking a lot of colourful commentary from economists.
The economy added 55,900 jobs in February, building on January's gain of 66,800, and far outpacing economists' estimate for 1,200 new positions.
The surprise reading comes amid a sharp slowdown in the economy, which started in the final quarter of last year, and caused the Bank of Canada to take a softer stance on future rate hikes earlier in the week.
With data on both sides of the border on Friday, February was also the first time that Canada created more jobs than the U.S. in a month since April 2012.
From what the data implies above the “monthly noise” to what it means for the central bank, here’s what economists are saying about the latest jobs report.
Douglas Porter, chief economist, BMO Financial Group
“Somebody forgot to tell the Canadian job market that a slowdown is going on … The ongoing gains in employment suggest that the current soft patch in broader activity is not morphing into something more ominous. Still, the reported sag in overall hours worked are a pretty clear indication that growth did, indeed, stumble around the turn of the year, and takes some of the shiny gloss off this release.”
Avery Shenfeld, chief economist, CIBC Capital Markets
“Is the Canadian economy a dead parrot, or like the one in the Monte Python skit, maybe it’s just resting, since today's jobs data seem to suggest that there's a lot of life left in it.”
Brian DePratto, senior economist, TD Economics
“With the trend pace of hiring the strongest it's been since the turn of the millennium and full-time jobs leading the way, there is a lot to like in today's report, even allowing for the usual disclaimer about the monthly noise. Perhaps most encouraging was the second monthly acceleration of wages, which outpaced inflation for the first time in six months.”
Stephen Brown, senior Canada economist, Capital Economics
“Another bumper rise in Canadian employment will help to soothe fears that Canada’s economy slowed even further at the start of the year. Although pay growth was also stronger than expected, we doubt that this will be enough to cause the Bank [of Canada] to put rate hikes back on the table.”
Krishen Rangasamy, senior economist, National Bank of Canada
“Those concerned about an imminent Canadian recession in the aftermath of last Friday’s disastrous fourth-quarter GDP report should be comforted by February’s Labour Force Survey … If you’re looking for a blemish in February’s report, look at the third consecutive decline in construction jobs, although the latter should not be all that surprising in light of a softening housing market ─ recall that housing starts took a dive in February.”
Derek Holt, vice-president and head of capital markets economics, Scotiabank
“I wouldn’t be surprised to see the Bank of Canada begin to shift its bias again over the summer in support of our forecast for a return to hiking in the second half. Clearly a lot else needs to go right along that path, but we’re generally constructive toward the outlook for the domestic economy, and cautiously optimistic toward geopolitical factors including trade policy.”
Nathan Janzen, senior economist, RBC Economic Research
“The labour force data is highly volatile and it is hard to believe that there won’t be an offsetting pullback in the monthly jobs count at some point — particularly given the slowing in economic growth over the winter (GDP increased just 0.4 per cent in the fourth quarter)."
Editor's note: Canada added 67,400 full-time jobs in February. BNN Bloomberg regrets an error in an earlier version of this story.