OTTAWA – Canada’s economy showed signs of thawing out from a long, bitter winter last month, churning out an unexpectedly high 42,900 net new jobs that helped shave the unemployment rate to 6.9 per cent — matching a post-recession low.
The Canadian jobs gain, although mostly part-time, was about double what economists had anticipated and more than wipes out February’s 7,000 dip.
The other surprise in the Statistics Canada report was that the vast majority of the new employment — 32,500 jobs — went to young Canadians, the 15-24 age group that has mostly been left behind during the recovery.
March’s advance helps shore up an employment picture than had turned decidedly bleak during the winter with job losses of 22,000 workers in a three-month stretch.
Markets reacted by lifting the loonie 0.62 of a cent to 91.21 cents US, adding to the recent tepid rally in the currency.
While not eye-popping numbers, analysts took the news as generally positive and confirming conventional belief that the economy’s slowdown during the winter months, and especially December, was mostly weather-related.
Also somewhat encouraging was the U.S. jobs report, which saw 192,000 jobs employees added last month. That was slightly below consensus, but it also included upward revisions to February and January’s numbers and a strong 0.7 per cent pickup in hours worked.
“The ice jam around Canadian employment appears to have finally broken,” said Doug Porter, chief economist with the Bank of Montreal.
“Combined with the recent upside surprises in inflation, the decent job gain further reduces the already very slim odds of a Bank of Canada rate cut, and provides a bit of near-term support for the loonie.”
The numbers weren’t likely strong enough to move the central bank off it’s neutral stance, though, economists noted. They still don’t expect interest rates to start heating up until sometime in 2015.
Over the past year, job gains are running at 1.1 per cent, or just above the growth in the labour force. March’s numbers means that job creation over the past six months has averaged slightly under 10,000, a tepid pace of growth.
Beneath the strong headline numbers there were some soft spots: three-quarters of the net new jobs, 30,100, were part-time and almost all were in the public sector. Hourly wage grewth was also modest. up 2.4 per cent year-over-year.
As well, all the new jobs went to the services sector, mostly in the health care and social assistance category, as well as in business, building and other support services. The goods producing sector shed almost 16,000 jobs, with agriculture and manufacturing both experiencing employment losses.
Tom Turpin of the Randstad Canada recruiting company said his firm has seen increased activity over last year in demand in the IT sector, particularly in Quebec.
“However, with a contentious election in Quebec, a possible spring election in Ontario and Alison Redford’s resignation our demand numbers are showing slower growth than usual for this time of year. Companies are waiting to see where the chips fall,” he added.
But the biggest factor impacting the economy recently has been the weather, analysts noted. Ice-storms in December and January in particular disrupted production and transportation.
“In general the weather is going to start helping in the next few months. We’re starting to see normalization across the board,” said Eric Lascelles of RBC Global Asset Management. “But I think we need to wait until the second quarter (April-June) before we start to see truly normal bounce-back type figures.”
In a statement released by his office, Finance Minister Joe Oliver cautioned that the global economy remains fragile and said his government would continue to focus on job creation and economic growth.
Regionally, most of the new jobs went to Canada’s most populous provinces, with British Columbia adding 18,300, Quebec 15,100 and Ontario 13,400. There were minor job losses in Alberta, Manitoba, Nova Scotia, Newfoundland and Prince Edward Island.