Positive signs on job front
OTTAWA—The national unemployment rate inched down to 7.2 percent last month as Canada’s employers added 7,300 jobs overall, although Ontario was the only province showing any significant gains in Statistics Canada’s report today.
That number of new jobs usually isn’t enough to reduce the national unemployment rate—it had been 7.3 percent in May—but June also saw a 16,600 drop in the number of active workers, which reduced the overall size of the labour force, Statistics Canada explained.
But aside from Ontario, which added more than 20,000 jobs last month, the differences from the previous month were small in comparison to their populations, the agency said.
It was the second month in a row that Canada saw minimal job gains after two stunning months—March and April—when the economy added 140,000 jobs.
Still, given the size of the earlier increases, analysts said it is good news that the early gains were confirmed by May and June’s numbers, rather than reversed.
And there were other aspects to like about the report, including that full-time employment rose by 29,300, offsetting a big decline in part-time work.
In addition, the number of hours worked increased by 0.4 percent while hourly wages rose 3.4 percent on an annual basis, up from May’s 3.0 percent.
“I’m never going to complain about a dip in the unemployment rate, and we did have a solid increase in hours worked in the month and the second quarter as a whole, which in some ways is almost a better measure,” said Doug Porter, deputy chief economist with BMO Capital Markets.
“People were working longer hours and getting paid more for their efforts,” he added, which should support consumer spending.
Economists said Canada’s jobs picture remained superior to that in the United States, which also reported minor job gains of 80,000 in June.
That kept the jobless rate south of the border a full point above Canada’s.
Given the gloomy overall global backdrop, Jimmy Jean of Desjardins Capital Markets called the Canadian employment result fair.
“It could have been much worse,” he said.
He added the June employment numbers probably will have few implications for the Bank of Canada’s interest rate policy.
The Canadian central bank had appeared itching to begin raising interest rates during the spring, but seems to have backed off in recent weeks.
With yesterday’s stimulative moves by central banks in continental Europe, the United Kingdom, and China, a rate increase from the Bank of Canada appears to be on hold for some time to come, analysts say, with some looking as far into the future as 2014.