Good news, bad news as latest figures are released
The latest Labour Force Survey has showed signs that the pandemic's effects are waning in Canada - with more jobs available and unemployment rate down. According to the survey, the number of additional jobs in November is 154,000, with the number of working Canadians at 19.3 million, The Financial Times reported. The unemployment rate was also at six per cent, while employment rate is at 61.4%, the highest since February 2020.
Labour Shortage
Despite these figures, Royal Bank of Canada senior economist Nathan Janzen said there was still "exceptionally low level of workers in the high contact service sectors."
"Employment in accommodation and food services edged up 5k from October but is still more than 200k below pre-shock levels," the economist said in a statement.
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"Travel and hospitality spending has been rebounding, but with the unemployment rate now substantially lower, it is increasingly clear that there are not enough remaining unemployed workers out there to re-fill all of those jobs any time soon," he added.
The economist also further warned of labour shortages in the future.
"Labour shortages are only expected to intensify," Janzen said. "Lack of labour supply means increased hiring demand is expected to show up more in above-trend wages than employment gains going forward."
Interest Rates
The current labour figures also further signal that the Bank of Canada could increase interest rates, according to different reports – something which could put pressure on homeowners. Bank of Canada Governor Tiff Macklem previously said in November that interest rates will not be hiked "until economic slack is absorbed."
"We are not there yet, but we are getting closer," he said in an opinion piece for The Financial Times.
A report from the Post said the bank will increase it early next year to "counter the strongest burst of inflation since the early 1990s." Royce Mendes, an economist from the Canadian Imperial Bank of Commerce, also told Bloomberg that the with the labour markets tightening sharply, the Bank of Canada is in a position to "hike earlier than we had expected."