Canada: Strong economic growth in the coming quarters will continue to support hiring – NFB

The February employment report in Canada surpassed expectations by showing an increase of 259.000 in jobs. Analysts at the National Bank of Canada continue to consider that the recent soft patch in the labour market should turn out to be “transient as strong economic growth ahead will support hiring.

Key Quotes:

“The poor streak of employment due to the second wave of Covid-19 ended in February as both Quebec and Ontario eased the sanitary measures put in place to bring the pandemic under control. Indeed, after a cumulative loss of 266K over two months, the job gain in February means that 97% of these losses have been recovered.”

“While these restrictions could gradually ease in the coming months with the advance of vaccination, these sectors could rebound strongly in the second half of the year.”

“We continue to think that the recent soft patch in the Canadian labour market should turn out to be transient as strong economic growth in the coming quarters will continue to support hiring. The Canadian economy will benefit indirectly from the huge U.S. fiscal stimulus program via stronger exports. The surge of raw material prices is also a positive development for the resource sector.”