Canadian economy has ‘turned the corner’

OTTAWA • Canada’s unemployment rate dropped to 6.6 per cent last month, its lowest level in more than two years, Statistics Canada said Friday, as the economy created more jobs than expected even with fewer people looking for work.

The report was the latest in a line of stronger-thanexpected data. Several economists hailed the numbers as further evidence that Canada’s economy is on the mend from the oil price shock of recent years, though at least one questioned the survey’s findings of a massive swing toward full-time employment at the expense of part-time jobs.

The decline of 0.2 percentage points from the previous month brought the unemployment rate down to a number not seen since January, 2015. The agency’s February employment survey indicated the national labour market added 15,300 jobs overall last month.

Economists had projected a gain of just 2,500 jobs and expected the unemployment rate to stay at 6.8 per cent, according to Thomson Reuters.

“The underlying economy continues to gain steam,” BMO senior economist Benjamin Reitzes said in a note to clients. “One more piece of evidence that the Canadian economy has turned the corner.”

The Statistics Canada report found most of the February job gains came from full-time work, offset by a decline in the number of people working part-time.

It said an estimated 105,000 people found fulltime employment last month while part-time positions dropped by nearly 90,000. That was in contrast to the January labour market survey, which showed a surge in part-time work.

“I find this hard to believe in terms of the details,” said Derek Holt, head of markets economics at Scotiabank Economics. He noted that the increase in full-time jobs would mark the strongest gain in almost 11 years while the part-time drop would represent the biggest decline since Statistics Canada began its labour force survey in 1976.

While the monthly employment numbers are typically volatile, Statistics Canada said that, in the 12 months to February, Canada saw a net gain of 288,000 jobs with most of the increase coming in the last six months of 2016.

Friday’s jobs report has taken the likelihood of a Bank of Canada interest-rate cut off the table, said Reitzes.

But the central bank is also unlikely to raise rates anytime soon, said TD Economics senior economist Brian DePratto.

AARON LYNETT / THE CANADIAN PRESS FILES Canada’s unemployment rate dropped to 6.6 per cent in February, Statistics Canada said, with most of the job gains coming from full-time work. “The underlying economy continues to gain steam,” says BMO senior economist Benjamin Reitzes.