Canada’s job creation growth wanes in April, jobless rate falls to 6.5 pct

The hot streak of Canada’s job creation waned in April. The nation recorded just 3.2k rise in jobs in April. In spite of the modest rise in employment, the jobless rate dropped 0.2 percentage points to 6.5 percent, the lowest since October 2008. Full-time employment dropped 31.2k following four months of solid gains, with part-time gains more than countering, up 34.3k on net.

Public sector hiring rose strongly by 35.2k, whereas hiring in private sector witnessed major declines of 50.5k, erasing almost all the gains seen in 2017 and breaking the seven-month trend of private sector outperformance, noted TD Economics. There was a continued rise in self-employment, matching last month’s gain, rising 18.5k positions on net.

Goods-producing sectors continued to recover, although at a much slower pace. It added 4.3k jobs in the month. Natural resources and agriculture were the outperformers, adding 1.4k and 4.3k jobs respectively. Meanwhile, construction hiring decelerated to just 600 jobs. Utilities and manufacturing recorded declines, whereas service sector hiring was slightly changed, dropping 1000 as declines in business support, accommodation and food and trade more than countered the rises in education, transport and health care.

Region wise, British Columbia recorded the highest gain in jobs, adding 11.3k positions. Newfoundland & Labrador recorded 1.9k gains, while P.E.I registered job gains of 800. The remainder of the provinces lost jobs on the month. Saskatchewan, Quebec and New Brunswick saw the biggest net losses.

Hours worked continued to quicken to 1.1 percent year-on-year in April from 0.7 percent year-on-year in the earlier month. Meanwhile, hourly wages continued to weaken, rising just 0.5 percent year-on-year.

The April report was not a great employment report. The job machine of Canada decelerated in April, coming in below expectations. Despite the drop in jobless rate, the report is not expected to encourage the Bank of Canada to alter its dovish tone on the outlook for the economy and Canadian monetary policy, noted TD Economics in a research report.

Especially, the weak wage data would highlight the likely cool-off in consumption over the medium-term. Meanwhile the weak showing in manufacturing underlines the increasing uncertainty regarding the nation’s trade relationship with its biggest trading partner, and might delay the rotation of growth towards exports, added TD Economics.