The Canadian Unemployment rate is the percentage of the total work force in Canada that is unemployed and actively seeking employment during the previous month.
Its impact is indicative in the economic outlook because the number of unemployed people is an important signal of the overall economic health and consumer spending is highly correlated with labor-market conditions.
Canada’s growth pattern has been in pace consistent with the developed nations. Tracking its growth trajectory through series of global recession, the economy was often seen roaring back with progressive move and job market upside bounce. On the first wave of the virus hit, more than two million people were left unemployed and rising risk sentiment took its tool. The Canadian dollar index declined rapidly and smashed series of successive support zones.
Following reopening and job market bounce, the Canadian dollar pulled through to the upside and currently gaining across boards. It maintains higher highs, erases all losses and outperforms all its pairs as bullish sentiment heightens.
Tracking the top industries by employment driving the labour market sentiment, health care sector tops the chart with market size of $70billion and over 651,335 employees. According to the National Health Expenditure Trends 2020 report, the healthcare system has 70.4% public fund sponsorship and 29.6% private sector sponsorship.
The second job sector toping the list is the Full-Service Restaurants. Statistics showed that the industry employed more than 557,859 employees with $33 billion market size.
Other industrial sectors on the list include Supermarkets and Grocery Stores with 398,942 employees and $103 billion dollars market size, Colleges and Universities with 318,727 employees and $44 billion market size, IT consulting 284,202 employees and $57 billion market size. In the IT consulting, companies with the largest market share include IBM Canada Limited, CGI Inc, Accenture PLC, Hewlett-Packard Enterprise and Pivot Technology Solutions Inc.
Commercial Banking has flourished through the years despite the hiccups in economic growth and low interest rates. Currently, it has over 281,293 employees with $240 billion market size. Also, inclusive on the list are the Pharmacies and Drug Stores with 188,396 employees and $47 billion market size, New Car Dealers and Office staffing and Temp Agencies.
Inline with the Bank of Canada’s goal of promoting maximum employment through its monetary policy system, it kept its interest rate low and unchanged till full recovery. There is strong speculation by analyst of unemployment Rate further decline from the previous 7.5%. Though its GDP shrank by 1.1% in the second quarter of 2021, the worst drop since the pandemic hit. The positive is that, its economy is outperforming in the third quarter (Q3 2021) and the stocks and equities are seen creeping higher with massive gains.
Regardless, traders should brace themselves up for a period of high volatility as the Unemployment report often have great impact on the FOREX market. A decrease in Unemployment Rate will usually strengthen the CAD (Canadian Dollar), while increase in Unemployment Rate will usually weaken the CAD (Canadian Dollar).
Traders should always be aware that volatile markets provide great opportunities for making profits, as the increase in volatility can cause market swings for traders to capitalize on.
The currency pairs that include the CAD (Canadian dollar) are mostly affected by the data release. USDCAD, GBPCAD, EURCAD, CADJPY, CADCHF, AUDCAD, NZDCAD etc.
Schedule for the Canadian Unemployment Rate Report:
Date: Friday, September 10th, 2021.
Time: 1:30 pm (GM + 1).
Author: Solomon Amogo
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