Canada Posts Surprise Employment Loss in JuneGreg Quinn
Canadian employment unexpectedly fell in June, with the second decline in three months led by the biggest drop in part-time work in almost two years.
Employment fell by 9,400 and the jobless rate rose for a second month to 7.1 percent from 7 percent, Statistics Canada said today in Ottawa. Twenty economists surveyed by Bloomberg projected a 20,000 job increase and no change in the unemployment rate, according to the median forecasts.
The country’s dollar fell with the last major data before Bank of Canada Governor Stephen Poloz’s July 16 interest-rate decision supporting his view there is plenty of slack in the world’s 11th largest economy. Poloz will probably keep the central bank’s policy rate unchanged at 1 percent for about a year until more of that slack is absorbed, according to a separate Bloomberg survey.
“The underlying trend is unquestionably squishy soft,” said Doug Porter, chief economist at BMO Capital Markets in Toronto. “This gives the Bank of Canada all the justification it needs to still sound quite dovish in next week’s interest rate decision.”
Employment growth since June of last year was the slowest since February 2010 at 0.4 percent, Statistics Canada said.
Canada’s dollar erased gains after the report, dropping 0.6 percent, the most since June 2, to C$1.0713 per U.S. dollar at 10:30 a.m. in Toronto. The yield on government bonds due in five years fell 2 basis points to 1.52 percent.
Part-time positions declined by 43,000 in June, the most since July 2012, and full-time employment rose by 33,500, today’s report said.
“The details are a bit better than the headline,” Camilla Sutton, head of currency strategy at Bank of Nova Scotia in Toronto, said in an e-mail. “Still, job growth in Canada is moderate at best, which will open the door to a still-dovish sounding Poloz.”
Jobs in the business, building and other support service category fell by 27,200 in June, bringing the 12-month decline to 1.4 percent.
Agriculture employment dropped by 14,500 in June for a 12-month decline of 7.1 percent, and manufacturing employment fell by 10,600.
Cascades Inc. said July 9 it will close a Kraft paper factory in East Angus, Quebec, with about 175 employees because of “unfavorable market conditions.”
Workers designated by Statistics Canada as employees fell by 32,800, and the self-employed category increased by 23,400 in June. Private companies cut 21,000 workers, and public-sector employment fell by 11,900.
The labor force participation rate remained at 66.1 percent in June for a third month, the lowest since November 2001.
Average hourly wages of permanent employees grew 1.9 percent in June from a year earlier, exceeding the 1.6 percent pace the prior month.