May 13, 2008

Canadian Economy

Number of new jobs rises, but so does unemployment rate

OTTAWA

The Canadian economy displayed some resilience last month by creating 19,200 new jobs in the face of stiffening headwinds from the U.S. slump that has led to outright job losses south of the border.

But while the April headline number surprised analysts on the high side, the details showed the cracks of a slowing economy and a mildly deteriorating job picture.

The national unemployment rate rose for the second straight month to 6.1 per cent, up one-tenth of a point following a two-tenths-point rise in March, Statistics Canada said last week.

Most of the new jobs were in the public sector or in the self-employment category. Full-time private-sector payrolls declined by 8,300.

“This is really about labour market weakness,” said Scotiabank economist Karen Cordes. “You never know with the self-employment sector whether there’s a gain because people can’t find jobs.”

BMO economist Douglas Porter noted that the details of the release were mixed, as manufacturing remained very weak, losing 14,900 jobs, and average hourly wages faded to a 4.3 per year year-over-year gain, down from 4.7 per cent in March and 4.9 per cent at the start of the year.

Nonetheless, Porter said, “the main point is that job growth continues to churn ahead even in the face of a U.S. recessionette.”

In comparison with the United States, Canada’s economy is a veritable job-making machine, according to the Statistics Canada data.

Over the past year, the proportion of working-age Canadians who have jobs increased by 0.5 percentage points to a record 64.5 per cent.

This compared with a 0.3-point contraction in the U.S. to 62.7 per cent.

Overall, Canada’s economy created 348,000 new jobs over the past 12 months, a 2.1 per cent increase, with full-time work rising twice as fast as part-time, Statistics Canada said.

The employment picture between the two close trading partners was like a mirror image, with the U.S. shedding jobs in construction and financial services, whereas Canada had large gains in both sectors, particularly construction.

But the carnage in factories continues, with April’s loss of 14,900 manufacturing jobs bringing the 12-month total to 111,500.

Most of those factory job losses came in the manufacturing heartland of Ontario, which accounted for 50,000 of the contraction over the past year.

British Columbia lost 29,000, Quebec 13,000 and even Alberta shed 11,000 manufacturing jobs.

The industry sector with the biggest job gain in April was accommodation and food services, up 22,000 — where United Steelworkers economist Erin Weir noted hourly wages averaged $11.14 last year, compared with $19.13 in all industries combined.

Canadian Press

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