Canada jobs market bounces back, unemployment lowest in a year

OTTAWA: Canada added a net 259,000 jobs in February, blowing past forecasts as the unemployment rate fell 1.2 percentage points to 8.2 percent - its lowest rate since March 2020, the national statistical agency said Friday.

The rebound, after two months of falling job numbers, coincided with a gradual lifting of pandemic restrictions as Covid-19 infections trended lower. But employment was still down about 600,000 jobs from pre-pandemic levels, said Statistics Canada.

"The quick turnaround is reminiscent of the first wave (of Covid-19 illnesses) when employment rebounded far faster than expected as the economy began reopening," said CIBC analyst Royce Mendes. Mendes suggested it could lead Canada's central bank to soon start tapering off its quantitative easing program - bond purchases to boost money supplies, ending and investment.

Several Canadian provinces have gradually lifted lockdowns ordered by public health authorities in December, allowing many businesses, cultural and recreational facilities, as well as restaurants to reopen.

But several parts of the economy continue to struggle. There were gains in both part-time (+171,000) and full-time (+88,000) jobs; the number of self-employed workers was unchanged for a second consecutive month; and the private sector added 226,000 new employees.

In February, total hours worked increased by 1.4 percent, driven mostly by gains in wholesale and retail trade. More people also returned to their traditional workplaces, leaving their home offices set up during the pandemic, as schools and offices reopened.

Earlier this week, the Bank of Canada revised its economic forecast, saying it expected growth in the first quarter to be positive rather than negative as it had predicted in January.

That followed a strong push in the fourth quarter of 2020 when the economy grew 9.6 percent. That surge, however, wasn't enough to lift Canada's pandemic-hit economy out of recession. For the year 2020, the economy contracted 5.4 percent - its worst plunge on record.