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While the U.S. economy is still shackled by unemployment and struggling to emerge from its worst recession in 70 years, Canada is already emerging from the economic downturn.
Employment in Canada rose for the second consecutive month in September, as 30,600 workers found jobs. The unemployment rate fell to 8.4% from 8.7% in August.
The manufacturing and construction sectors, benefiting from a rise in home prices and government stimulus, were out in front of the surge. Manufacturing firms added 26,100 jobs, while 24,600 workers found jobs with construction companies. Eight of the 16 industries tracked by Statistics Canada logged job gains.
Wages rose, as well, with hourly pay for Canadians jumping 2.5% in September from a year earlier.
After a 0.1% increase in June, Canada's gross domestic product (GDP) was flat in July, Statistics Canada said. With unemployment falling sharply in both August and September there's a good possibility that the nation's third-quarter economic growth was sharply positive.
That means the Central Bank of Canada (BOC) could be the next central back to raise its key borrowing rate – currently at 0.25% – following Australia.
The impressive employment figures "will certainly lead the Bank of Canada to focus on the timing of future interest-rate increases set out in its conditional commitment to hold interest rates at the current level until the second quarter of 2010," Millan Mulraine, economics strategist at TD Securities Inc. told The Vancouver Sun.
The Reserve Bank of Australia on Tuesday unexpectedly raised interest rates 0.25% to 3.25%, making it the first Group of 20 (G-20) nation to raise borrowing costs since the start of the biggest economic meltdown in 70 years.
"Nonetheless, while for now we continue to expect the policy rate to remain unchanged until the fourth quarter of 2010, we think that the risks of an earlier move have increased dramatically," he added.
News & Related Story Links:
- Vancouver Sun:
Canada adds 31,000 jobs in September
Oh dear, it’s not good news in the financial world. Not only has unemployment reached new levels – jobless Americans have totalled 14.9 million, the worst in 26 years and in England, 2.5 million are out of work. The worst levels since 1995 and experts predict unemployment will reach 3.5 million in a decade. Personal debt has reached dizzy new heights too. For yet even more uplifting news, Britain’s national debt will reach around £1.4 trillion under the new budget as MPs plan to borrow a further £700 billion in the next few years. This unprecedented borrowing has sparked a… Read more »
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[…] Australia earlier this month became the first developed economy to tighten monetary policy. Canada, which has shown signs that it is emerging from the economic downturn faster than the United States, …. And now China – whose gross domestic product (GDP) expanded by 8.9% in the third quarter – is […]