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Modest April rebound offers hope of modest jobs growth going forward

In the first four months of the year, Canada has seen a net loss of about 13,000 workers.

OTTAWA – After suffering through the worst month in four years, Canada’s jobs market turned modestly positive again in April, churning out 12,500 net new jobs — all of them full-time — in a signal the long winter of labour market contraction may be at an end.

The modest pick-up helped take the sting out of March’s massive 54,500 contraction, although it was not enough to budge the unemployment rate from 7.2 per cent.

Nor was the gain sufficient to completely reverse the losses of the first three months of the year, leaving Canada about 13,000 jobs short of where employment stood on Jan. 1.

Economists said the result was more in line with the slow-growing economy and expected future months would produce similar results.

Jimmy Jean of Desjardins Capital Markets said the employment report may have marked the return to more ‘normal’ results.

“Given the growth patterns we’re seeing right now, it’s the sort of job creation we normally ought to see. It was a decent number,” he said.

The loonie ended the day down 0.37 a cent at 98.89 cents US on Friday, but it was unclear whether the labour market report was the instigation or whether the weakness was a hold-over from a drop Thursday.

The jobs report was mixed enough to provide both solace and concern going forward.

Among the strengths, there were 36,000 full-time jobs added in the month, mitigated by a 23,600 drop in part-time work. As well, all the net new jobs were employees, rather than the self-employment category. And the battered manufacturing sector added 20,600 workers, the best month in almost a year.

On the negative side, all the gains came in the public sector — private-sector employers actually shed 20,000 jobs.

That goes against expectations given that many governments in Canada have been tightening their belts in an effort to rein in deficits, but Statistics Canada noted the April numbers are in line with a year-long trend. In the past 12 months, the government sector has created 93,500 new jobs, while private-sector employers have added only 10,000.

Another weakness is that the participation rate continued to edge down to 66.5 per cent, the lowest level in over 10 years and down from a high of 67.8 prior to the 2008-09 recession.

Economist Erin Weir of the United Steelworkers union noted that although unemployment numbers remain stable, the lower number of Canadians counted as being in the work force suggests there are more jobless than the official count.

“One would expect the participation rate to decline over time as more Canadians retire,” he said. “However, April’s figures reflect a drop in labour-force participation among those below the age of 25 rather than long-term population aging.”

Employment among youth — those aged 15-24 — fell by 19,000 jobs in April, while the unemployment rate in the age group rose three-tenths of a point to 14.5 per cent. Economists have noted that young workers is the only category counted by Statistics Canada that has not recovered the jobs lost during the recession.

Still, analysts said the April results will likely have no bearing on the Bank of Canada’s low interest rate policy.

Going forward, Jean expects Canada will see a more stable, if modest, job creation record, with growth in the 15,000-a-month range in line with the slow-growing economy.

He attributed the bad jobs start to the year to the poor economy of the second half of 2012, when growth fell to about 0.7 per cent annualized. Economists expect the first quarter of 2013 to see a return to plus-two-per-cent growth, however, which should entice employers to hire in future months.

Aside from manufacturing, the big gainers in terms of jobs growth in April were public administration, with an increase of 13,000, and health-care and social services, which picked up 18,000 workers.

The most pronounced job losses came in transportation and warehousing, shedding 21,000 workers. Employment in other services such as repair and maintenance was down 19,000 and those in business, building and other support services declined by 16,000.

Regionally, Alberta had the biggest job increases, adding 15,000 new workers, while Manitoba saw a decrease of about 11,000. Changes in employment in other provinces were modest.