Canada Adds Most Jobs Since 2008 as Full-Time Work Soars
Canada added the most jobs since September 2008 last month, a gain dominated by full-time positions that revived what had been a stalling labor market in the world’s 10th largest economy.
Employment rose by 82,300 following a decline of 2,800 in February, Statistics Canada said today in Ottawa, lowering the jobless rate to 7.2 percent from 7.4 percent. Economists surveyed by Bloomberg News projected a 10,500 gain in jobs and 7.4 percent unemployment, according to the median forecasts.
Employment growth should add to household spending that the Bank of Canada said last month has been rising faster than expected. Governor Mark Carney said in an April 2 speech that high household debt loads and sluggish exports remain major risks to the expansion, and he has kept his key lending rate at 1 percent since September 2010 to boost demand.
“This was a blockbuster report,” said Mazen Issa, Canada macro strategist at TD Securities in Toronto. “There could be a slight tinge of hawkishness” in the central bank’s next interest-rate announcement on April 17, he said.
Canada’s dollar strengthened 0.3 percent to 99.36 cents per U.S. dollar at 4:28 p.m in Toronto. One Canadian dollar buys $1.0066. Canada’s benchmark 2-year bond fell, with the yield rising 4 basis points to 1.26 percent.
There were also signs of labor-market strength in the U.S. today, which buys three-quarters of Canada’s exports. Claims for U.S. unemployment benefits dropped last week to the lowest level in four years, the Labor Department said today in Washington, while the Bloomberg Consumer Comfort Index reached a four-year high.
Full-time employment in Canada jumped by 70,000 in March while part-time positions grew by 12,400, Statistics Canada said. About 42,600 jobs were created by private companies and 20,900 in the public sector.
Health care and social assistance employment rose by 31,500 in March, followed by a gain of 28,300 for information, culture and recreation firms. Manufacturing rose by 11,800, the fourth consecutive increase.
Toyota Motor Corp. said March 28 it would add about 400 new jobs at a Woodstock, Ontario, factory to increase its production capacity of RAV4 model vehicles.
“The momentum in the economy is stronger than previously thought and we are better able to weather these external shocks,” said Paul Ferley, assistant chief economist at Royal Bank of Canada in Toronto. “We had been seeing no growth in jobs so far this year, which raised concerns,” and today’s report may lead the central bank to raise rates sooner, he said.
Average hourly earnings of permanent employees rose 2.5 percent in March from a year earlier, faster than the prior reading of 2.1 percent. The Bank of Canada says that figure is a key indicator of inflation.
Workers designated by Statistics Canada as employees rose by 63,600 while the self-employed rose by 18,800 in March.
Public administration work rose by 15,000 positions in March, Statistics Canada said.
The largest job loss by industry in March was a 24,600 decline for educational services.
Finance Minister Jim Flaherty’s budget last week showed plans for 19,200 federal government job cuts, or 4.8 percent of the total, to help eliminate the budget deficit. About 7,200 of those reductions will come through expected attrition.
Risks to Recovery
Policy makers will recognize that today’s report won’t be repeated and “it still remains a fragile recovery” in part because of lingering risks in Europe, Issa at TD Securities said.
Spanish Prime Minister Mariano Rajoy said April 4 that his country is in “extreme difficulty” and signaled that budget cuts would be less painful than a bailout. The country’s jobless rate of 23.6 percent is the highest in the European Union and Rajoy’s budget seeks spending reductions to cut 3.2 percentage points from a budget shortfall that was 8.5 percent of output last year.
Today was the first time Statistics Canada released its jobs report at 8:30 a.m., rather than 7 a.m., a move that standardizes publication times.
In a separate report, the agency said building permits rose 7.5 percent in February to C$6.51 billion ($6.52 billion), faster than the 2 percent gain economists forecast. Non- residential permits jumped 36.2 percent to C$2.54 billion while residential permits fell 5.3 percent to C$3.97 billion.
The U.S. may report tomorrow that payrolls increased by 205,000 in March with unemployment unchanged at 8.3 percent, according to the median estimates in a Bloomberg survey.
To contact the reporter on this story: Greg Quinn in Ottawa at email@example.com