Canadian employment rose in line with economist forecasts in April as manufacturers added the most jobs in 11 months, adding to evidence of a modest expansion.
Employment rose by 12,500 and the jobless rate was unchanged at 7.2 percent, Statistics Canada said today in Ottawa. Economists surveyed by Bloomberg News projected a 15,000 job gain and 7.2 percent unemployment, according to median forecasts.
Canada is recovering from a slump in exports and investment late last year, with the April gain following March’s employment drop of 54,500. Still, the labor market is forecast to stall this year with unemployment averaging 7.1 percent in the fourth quarter, according to a separate Bloomberg economist survey.
“The increase in April suggests the economy still has very little momentum,” Sal Guatieri, senior economist at BMO Capital Markets, said by telephone from Toronto. He cited the 13,200 net jobs lost this year and the April decline in private sector employment.
Private companies cut 20,000 workers and public-sector employment rose by 34,200 in April, Statistics Canada said. Full-time employment increased by 36,000 while part-time positions dropped by 23,600.
The Canadian dollar dropped the most in three weeks after the report, depreciating by as much as 0.8 percent before trading 0.5 percent weaker at C$1.0118 per U.S. dollar as of 3:38 p.m. in Toronto. It touched C$1.0014 yesterday, the strongest since Feb. 15. Benchmark two-year government bond yields rose 4 basis points to 1 percent.
Manufacturing rose by 20,600 positions in April, the biggest monthly gain since May last year, according to Statistics Canada. Factory employment remains lower than a year ago by 51,800 jobs, a drop of 2.9 percent.
Old Dutch Foods Ltd. said May 7 it will close a Montreal snack-food factory and warehouse that employed 216 people in September because it wasn’t feasible to renovate the buildings constructed in 1964.
“Canada is going to continue to have sluggish growth” in the next two years, said Dean Connor, chief executive officer of Sun Life Financial Inc., in a phone interview May 9 from Toronto. “It’s driven off of demand for commodities and a slowdown in expansion of credit in the housing sector.”
Bank of Canada Governor Mark Carney cut his 2013 growth forecast last month to 1.5 percent from 2 percent, citing drags from housing investment, exports and slower government spending. Other reports this month have shown Canada’s first trade surplus in a year and a decline in housing starts.
Government hiring was a strong part of today’s report, with public administration increasing by 13,200 positions in April. Workers designated by Statistics Canada as employees rose by 14,200 while self-employment decreased by 1,700.
Average hourly wages of permanent employees rose 2.8 percent in April from a year earlier, exceeding the prior reading of 2.1 percent.
“I am pleased that more Canadians are working, as job growth was positive and on the right track,” Finance Minister Jim Flaherty said in a statement today. “Our government will remain focused on creating well paying jobs, driving economic growth and long-term prosperity for all Canadians.”
McDonald’s Corp., the world’s biggest restaurant chain, said on April 11 it planned to hire more than 6,000 people in Canada as part of an annual one-day hiring event.
Today’s employment figure “is still a bit of a disappointing result, given such a small fraction of the harsh dip of March was recovered,” said Jimmy Jean, a fixed-income strategist at Desjardins Capital Markets in Montreal.