These are stories Report on Business is following Friday, April 4, 2014.
The Canadian dollar popped above the 91-cent (U.S.) mark today as the country’s March jobs report came in much better than expected, the latest in a series of stronger economic readings.
The loonie, as the country’s dollar coin is known, climbed to about 91.1 cents by late in the day, after the Statistics Canada report showing 42,900 jobs created last March.
That was up from 90.7 cents in advance of not only the Statistics Canada report, but also a fresh reading of the U.S. labour market.
The Canadian report was stronger than forecast, while the U.S. release was somewhat in line with what economists had anticipated.
“In Canada, we now have a string of better-than-expected releases,” said chief currency strategist Camilla Sutton of Bank of Nova Scotia, referring to earlier measures of gross domestic product and inflation.
The loonie had been a long decline, being hit most recently by the different tones of the Canadian and U.S. central banks, though of late that has levelled off. Indeed, the currency has picked up from its most recent depths.
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Canada’s jobless rate dipped below the 7-per-cent mark in March as the economy churned out 42,900 jobs, though many of them part-time positions.
Young people, in particular, saw a more robust labour market, Statistics Canada said today.
Employment in Canada is now up by 190,000 since March, 2013, and, as The Globe and Mail’s Tavia Grant reports, the jobless rate is down to 6.9 per cent from 7 per cent in February.
Among young people between the ages of 15 and 24, employment climbed by 33,000 last month. Having said that, the youth jobless rate held steady at a still-high 13.6 per cent, with more young people joining the work force.
The gains came in the public sector, with more than 39,000 new jobs, while private employers hired about 4,000 people.
Part-time work accounted for most of the increase, at about 30,000, though full-time jobs rose by almost 13,000.
Chief economist Avery Shenfeld of CIBC World Markets said some observers may “downplay” the March numbers because measures of part-time and public-sector work show volatility and private-sector and full-time increases were softer.
“But we note that private sector employment is up 1.8 per cent from a year ago, with the public sector and self-employment both flat,” he said.
U.S. adds 192,000 jobs
The U.S. jobs report, meanwhile, showed 192,000 jobs created in March, in line with what many economists had expected, though below what some had hoped for.
The unemployment rate held steady at 6.7 per cent as more Americans went looking for work.
Not only was hiring strong, previous measures for January and February were revised up.
“The March employment report remains consistent with that of an improving economy,” said chief economist Stéfane Marion of National Bank of Canada.
“The level of private payrolls is now back to its pre-recession peak and the diffusion is good with a vast majority of industries now in the process of adding to their headcounts,” he added.
“We also take comfort from the fact that full-time employment remains on an uptrend with five consecutive gains and ten increases in the past 12 months.”
The stronger pace of hiring justifies the Federal Reserve’s calm in the face of disappointing data early this year, our Washington correspondent Kevin Carmichael writes.
Janet Yellen, the Fed chair, and other officials stuck with their plan to steadily reduce their monthly purchases of financial assets, betting that the economy was strength enough to push through a spate of weather interruptions. Before December, the U.S. economy had created more than 200,000 jobs in three of four months.
That first home
Amid all the angst over the housing market comes a new look that suggests younger Canadians will help support it.
That portion of the population in the 25-34 age group is increasing at a year-over-year pace of almost 2 per cent, says a Bank of Montreal economist.
Within that group, notes Robert Kavcic, the population in the 30-34 bracket is rising by 2.6 per cent, or the fastest in some 25 years.
The rise in the 25-34 group is “another fundamental support” for the residential real estate market, Mr. Kavcic believes.
“These age groups, of course, are prime years for first-time buying, having kids and then looking for a bigger yard,” the BMO economist said.
“Not also that the period when this group was in decline during the 1990s coincided with the prolonged bear market in Canadian housing,” he added in a research note, also citing Statistics Canada forecasts.
“Looking ahead, StatsCan projections show the 25-34 group still expanding over the next decade, albeit at a cooling rate.”
Mr. Kavcic’s observations come amid intense hand-wringing over the outlook for Canadian housing. Some observers believe the market is awfully frothy, while many others say it’s headed for a soft landing.
Add to that the questions surrounding the data on the market, as The Globe and Mail’s Tara Perkins reports.
- Rob Carrick: Gen Y: Don't believe the hype on home ownership
- Tara Perkins: Holes in housing market data have economists worried
- David Parkinson in ROB Insight (for subscribers): Canada is roaming blind through a statistical desert
- Tim Kiladze: TD CEO backs Ottawa's hands-off approach to mortgage rate cuts
- Tara Perkins: Why the doomsayers are wrong about Canada's housing market
- Video: This is Canada's new hottest housing market
Streetwise (for subscribers)
ROB Insight (for subscribers)