Hiring pace in Canada to ease in coming months, national jobless rate to drift slightly higher in 2016

In March, Canada’s employment increased by 41k jobs. Employment was majorly unchanged in the previous three months. The increase in new jobs lowered Canada’s jobless rate to 7.1% in March from previous month’s 7.3%. However, unemployment continues to be higher than the level of 6.8% seen one year ago in spite of the rebound seen in March.

The details of the numbers were also strong. Full time jobs grew 35k in March, while part-time jobs rose by 5k. Private sector added 65k new positions in March, and is mainly responsible for most of the hiring in the past year. Self-employment and public sector hiring was relatively flat.

Food and accommodation services and “other services” within private sector hiring witnessed largest increase in terms of percentage; however, gains were widespread throughout the services sector. Last month, technical, scientific and professional jobs grew by 12k and have risen at a pace of 3.8% in the past year. Meanwhile, social assistance jobs and health care jobs also increased by 25k, rising 3.4% y/y.

However, manufacturing lost 32k jobs, with loses widespread throughout regions. Moreover, resource sector lost 2k positions in March, while employment in construction declined by 5.5k after increasing by 34k in February. Alberta recorded 19k new jobs in March; however, the jobless rate in the region continues to be 1.5 percentage points higher than one year ago.

Canada’s increase in hiring last month takes the six month trend up to 11k net new jobs per month, ahead of the economic momentum, according to TD Economics. The hiring pace is likely to ease in the following months as the Canadian economy continues to adjust to an environment of lower oil price, added TD Economics.

The employment scenario for the nation shadows the reality for several provinces due to divergent performances at regional level, noted TD Economics. The divergence is likely to continue. The national jobless rate is likely to be slightly higher in 2016 as sluggishness in oil-producing regions impacts other sectors, said TD Economics.