Canadian employment gains rise strongly in February

The Canadian economy added 15.4k jobs on net in the month of February. The participation was effectively unchanged, leading to a decline in the jobless rate to 5.8 percent. Part-time jobs mainly drive the gains, rising 54.7k. Full-time employment fell 39.3k net positions, ending a five-month streak of net job additions. Most of the gains were seen in the public sector, while the private sector added 8.4k net jobs. Holding back the overall rate of gains was a decline in self-employment, falling 43.3k in February after four months of net rises.

Industry wise, net job additions came from the service-producing sectors, with marked rises in health care, other services, and transportations. Trade stood out on the negative side, shedding 22k net positions. Goods-producing industries negatively contributed 10.4k from the total, led by a 16.5k net decline in manufacturing employment.

Region wise, Ontario led the way, adding 15.7k net positions. Performances were mixed throughout the remaining provinces. Alberta’s jobless rate dropped to 6.7 percent, a 1.5 percentage point decline relative to its year-ago level, as the provincial participation rate dropped a bit in February.

Wages slowed slightly in the month to 3.1 percent year-on-year. In spite of the part-time work driving the net job gains, aggregate hours worked were up 3.2 percent year-on-year, underpinned by a month-on-month rise of 0.6 percent.

Given a tight labor market, headline job gains are expected to trend around or slightly below February’s rate going forward, noted TD Economics in a research report. The rate of yearly gains is easing, but this is to be expected given that economic and labor market slack has greatly been absorbed.

“It thus seems that the Bank of Canada has set the wage gains of 2007/2008 as their guideline (wage growth at the time exceeded 4 percent, or more than 7 percent in national accounts measures). This suggests that today's solid wage numbers, while welcome, are unlikely to change the Bank's cautious stance”, added TD Economics.

At 18:00 GMT the FxWirePro's Hourly Strength Index of Canadian Dollar was neutral at 48.9147, while the FxWirePro's Hourly Strength Index of US Dollar was slightly bullish at 73.2059. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex

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