Canada stuns with biggest job gains in 11 years
OTTAWA: Canada’s economy created a surprising 95,000 jobs in May, the biggest monthly gain in 11 years, and most were full-time positions and in the private sector, according to Statistics Canada (Statscan).
The stellar performance handily beat market expectations for a 15,000 gain and came after just 12,500 jobs were generated in April.
The May data brings the average monthly employment growth to 19,000 over the past six months, considered a more accurate reading because of the volatility of the labour force survey data. The jobs gain is well above the margin of error. The unemployment rate ticked down to 7.1 per cent in May from 7.2 per cent.
“Suffice to say, this comes as a surprise. I think that’s probably one of the understatements of the year. This is one of the largest monthly increases in employment on record,” said Doug Porter, chief economist at BMO Capital Markets.
“It really does change the picture for the job market. Instead of being mired in a prolonged period of weakness, it looks like the underlying trend in employment is still chugging along quite nicely,” he said.
The report also comes as good news for the Conservative government, which is reeling from an expenses scandal but has tried to brand itself as a strong steward of the economy and public finances.
Some 76,700 full-time positions were added in the month and 94,600 jobs were in the private sector, Statscan said.
The construction sector did the most hiring, adding 42,700 jobs in May, followed by trade, “other services” and business, building and other support services. Sectors showing losses included manufacturing and professional, scientific and technical services.
Employment in recent months has been largely in line with tepid economic growth. But after a sluggish second half of 2012, rising exports helped revive growth in the first quarter to an annualised rate of 2.5 per cent, the fastest in six quarters.
The Bank of Canada, which is expected to hold its key rate at 1 per cent until late 2014, has forecast 1.8 per cent growth in the second quarter and 1.5 perc ent growth in 2013 as a whole.
The employment statistics are based on a sample survey of representative households and are considered accurate only to within plus or minus 57,400 – or 19 times out of 20.
In a separate report, Statscan said the labour productivity of Canadian businesses increased 0.2 per cent in the first quarter, in line with expectations. It was the second straight quarter of weak growth following three quarters of declines.
Canada has generally fallen behind the US on productivity measures and in the first quarter that was the case, with US labour productivity growing 0.5 per cent.
Canadian business output expanded 0.7 per cent in the first quarter while hours worked rose at a slower 0.5 per cent pace.
Labour unit costs in Canada declined 1.8 per cent when measured in US dollars compared with a 1.3 per cent decline for American businesses.