Canada Jobs Little Changed in June After May’s Huge Gain
Canadian employment was little changed in June, government figures showed, following the biggest gain in a decade the month before.
Employment fell by 400 last month after May’s surge of 95,000 while the jobless rate was unchanged at 7.1 percent, Statistics Canada said today in Ottawa. Economists surveyed by Bloomberg News projected a 7,500 job decline and an unchanged jobless rate, according to median forecasts of surveys with 20 responses.
“It’s a flat number but it’s probably the most shocking flat number we have seen in a while,” said Jimmy Jean, a fixed-income strategist at Desjardins Capital Markets in Montreal. “The concern was we were going to see a big payback after a strong month,” he said. “I was skeptical we could even hang on and we did that.”
The report adds to other evidence of an inconsistent expansion, including a record string of 17 monthly trade deficits and inflation that has been below the central bank’s 2 percent target for more than a year. Jean said future job gains will probably be closer to a range of between 10,000 and 20,000 than the 95,000 recorded in May.
The Canadian dollar fell to the lowest since October 2011 after the job decline contrasted with a U.S. payrolls gain of 195,000. The currency fell 0.7 percent to C$1.0583 per U.S. dollar at 9:44 a.m. in Toronto. One dollar buys 94.49 U.S. cents. Government bonds fell, with the yield on the two-year benchmark rising 5 basis points to 1.23 percent and the 10-year climbing 14 basis points to 2.55 percent.
Canada’s job gains have slowed so far this year, with the average monthly gain of 14,000 less than the 27,000 recorded in the second half of last year, Statistics Canada said.
Full-time employment fell by 32,400 in June, following a 76,700 gain the prior month. Part-time positions rose by 32,200, Statistics Canada said.
Private companies cut 5,300 workers last month after May’s 94,600 increase, while public-sector employment rose by 1,000.
By industry, construction employment rose by 1,400 in June after May’s gain of 42,700. The biggest rise was the 27,000 increase for professional, scientific and technical workers and declines were led by accommodation and food services at 20,300.
Workers designated by Statistics Canada as employees fell by 4,400 after May’s 101,200 surge. The self-employed category rose by 4,000.
Average hourly wages of permanent employees rose 2 percent in June from a year earlier, matching the prior reading.
Consumer spending underpinned by job creation and a housing boom has led growth in the world’s 11th largest economy since the global financial crisis of 2008. Bank of Canada Governor Stephen Poloz has said households should curb record debts and the expansion needs to be led by business spending and exports.
“We spent our way through the crisis and recouped our lost jobs earlier than the U.S. did,” said Derek Holt, Scotiabank’s vice president of economics in Toronto. “The U.S. is going to be leading Canada on growth as they unleash pent-up demand.”
Unemployment will remain close to where it is now over the next year, according to a Bloomberg economist survey that forecasts a 6.9 percent rate for the third quarter of next year.
The compilation of the report was slowed in Alberta by flooding last month, which appears to have had a “negligible” impact on the results, Statistics Canada said. The next job survey will add special questions on the impact of the flooding on hours worked in the oil-rich western province.
To contact the reporter on this story: Greg Quinn in Ottawa at email@example.com