Canada has best two month jobs gain in 30 years as 58,200 added in April
Canada booked its best two-month employment gain in three decades with news Friday that the economy churned out 58,200 new jobs in April, the strongest signal in some time the economic recovery may be coming out of a mid-winter stall.
The report was far stronger than anyone anticipated with Canadians able to find net new jobs in seven provinces across the country, many full-time and in the high-paying manufacturing, construction and resource industries.
Combined with March’s 82,300 jobs number, the 140,500 total is the best two-month employment performance the country has seen since 1981.
While welcoming another strong report, politicians and economists invoked caution about what the job creation numbers mean for the economy going forward.
“The job numbers … are actually very good,” Prime Minister Stephen Harper said at an event in Edmundston, N.B.
“But I don’t want us to become complacent. We watch these numbers every month carefully and there’s lots of fluctuation, and the whole economy all around us remains very challenging, especially in Europe.”
Finance Minister Jim Flaherty echoed the sentiment, saying the global recovery remains “very fragile.”
Bank of Montreal economist Doug Porter said the Canadian data suggests the country is a kind of island of tranquility in a sea of turbulence, noting that while jobs climbed in Canada, the U.S. had shown signs of losing momentum and Europe slipped back into political and economic turmoil.
The only negative was that the unemployment rate edged up one-tenth of a point to 7.3 per cent. But Statistics Canada said that was because even more people went looking for work last month — a signal of labour market strength rather than weakness.
“Wow. Where did this come from?” Porter said.
“(This) doesn’t seem to jibe with very much else in the economy, but maybe this was a case of things being understated in prior months and now we’re getting catch-up.”
Analysts said the data presents Canadians with two separate pictures of the economy, given that prior to March, employment had been mostly flat going back to the summer.
Either job creation truly was stalled only to rebound with a vengeance as spring approached, or Canada had been experiencing moderate employment growth all along, a reality that was only captured in the household labour survey in the past two months.
Coincidentally, Statistics Canada’s less timely and lesser-known employers survey had been reporting steady growth throughout the fall and early winter, when the more well-known household survey was showing flat or falling numbers.
And with April’s numbers, the two surveys now appear to be in sync — both now show a 1.2 per cent job growth over the past year, although the employers’ survey is only to February.
Either way, the numbers point to an economy that continues to distance itself from the wreckage of the 2008-09 recession, although at a moderate rate, said analysts.
“With this report, the lull of last winter has been all recovered and employment is right back to its trend. Thus, further improvements of this size are highly unlikely,” said Jimmy Jean, economic strategist with Desjardins Economic Studies.
The jobs trend, if confirmed in subsequent months, could give the Bank of Canada more impetus to start hiking interest rates, as governor Mark Carney suggested last week.
But many economists still believe Carney will remain on the sidelines throughout 2012, given that the global environment is if anything worsening, particularly in Europe, and risks are rising.
The markets saw the report as positive, with the Canadian dollar leaping past parity on the morning opening, rising 0.31 of a cent to 100.14 cents US.
As impressive as April’s headline jobs number was — the details were stronger.
Unlike the previous month, when most of the new jobs were concentrated in Central Canada, this time the gains were spread across the country with employment rising in the Atlantic region, Quebec and the West — although Ontario, Nova Scotia and Manitoba missed out on the action with minor job losses.
Also impressive was that most new workers were full-time and all were in the private sector, as well as being new hires rather than in the softer self-employment category.
In fact, the number of employees rose by 66,600, more than making up for a small loss of self-employed workers, and the private sector added 85,800 as government jobs fell by 19,200.
Over the past year, Canada has added 214,000 new jobs, more than half in the last two months.
By industry, Statistics Canada said construction added the most workers, 24,600, followed by manufacturing, 23,800 — welcome news in an export-dependent sector that has been struggling due to weak foreign markets and the high Canadian dollar.
Other gainers in April included natural resources, 11,000; agriculture, 10,000; and education services, 17,000.
Offsetting the gains, public administration shed 32,400 workers, likely an indication of government restraint.
Although Canada’s unemployment rate at 7.3 per cent is still more than a full point above pre-recession levels, Statistics Canada inserted a historical note to show how much better Canada’s labour market has fared since the recession and in the past decade compared to the United States.
From the early 1980s until 2008, Canada’s unemployment rate was consistently higher than south of the border, it notes. But since 2009, the Canadian rate has been about 2.5 percentage points lower on average.
As well, Canada now has a greater number of workers as a percentage of the working-age population than the U.S., a reversal of pattern than existed prior to 2002.
“In April, the employment rate was 62.6 per cent in Canada when adjusted to the U.S. concepts,” the agency said. “This was 4.2 percentage points higher than the comparable rate of 58.4 per cent in the United States.”