Canadian Economy Unable To Create Enough Jobs For Population Growth: BMO

Dated: May 19 2024

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Greetings everyone, Anahid here.

I'd like to share a brief overview of an article I came across in The Better Dwelling titled "Canadian Economy Unable To Create Enough Jobs For Population Growth: BMO".  Enjoy the read.
In April, the Canadian economy experienced a surprising surge in job creation, with Statistics Canada reporting tens of thousands of new jobs. Despite this near-record increase, BMO cautioned investors that the market might not be as robust as it appears. Due to Canada's booming population growth, the newly added jobs failed to meet the minimum requirements, resulting in further expansion of the country's unemployed population. Data from the past year suggests that only one in three new workers found employment at the margin, challenging the narrative of economic prosperity.

Although April witnessed a notable increase of 90,000 jobs in Canada's job market, there was a caveat: the country's population growth outpaced the creation of new jobs. Stat Can data revealed a net gain of 107,500 workers over the same period, indicating that job gains were insufficient to meet the demand created by immigration. While policymakers celebrated these job gains, the reality of record population growth necessitates even more substantial job creation just to maintain equilibrium.

The Bank of Canada's interpretation of this data remains uncertain. Will the job gains be sufficient to postpone potential cuts, akin to what the US Federal Reserve is considering, or will the central bank view them as inadequate to meet job demand, necessitating further stimulus? BMO's chief economist, Douglas Porter, suggests that Canadian employment reports are often volatile and may not carry significant weight for the central bank's decisions.

Looking beyond the immediate job numbers, Porter advises focusing on longer trends, noting that a 24% annual growth in the unemployed population, just shy of the typical recession threshold of 25%, indicates growing risks. Despite the significant job gains over the past year, Canada added even more workers, resulting in less than 35% of new adults finding employment at the margin. This highlights the challenge of the economy in generating enough jobs to keep pace with population growth, a concern that persisted even amidst the April job surge.
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Anahid Shahmoradi

Your Dreams, My Dedication - Real Estate With Compassion and ResultsWith a wealth of knowledge in real estate and home staging, I specialize in helping buyers and sellers navigate the Alberta real est....

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