Canada gains 19,400 jobs; U.S. unemployment rate declines

Canada’s labour market pumped out another 19,400 net jobs last month, with the vast majority of the new work being full-time.

However, Statistics Canada’s job survey Friday also showed the bulk of those new positions were created in the more precarious category of self-employment, which can include people working for a family business without pay.

The report found that while 95% of the new jobs created last month were full-time, 95% of them were also self-employed positions.

The agency says the country’s unemployment rate crept up in March to 6.7% from 6.6% because more people were looking for work.

The increase in the headline jobs number suggests the country’s upward trend continued for a fourth consecutive month. But the gains in February and March were low enough that the agency deems them statistically insignificant.

In a note about the news, TD Economics senior economist Brian DePratto says, “Heading into the Bank of Canada’s Wednesday policy interest rate decision, the jobs data will likely have only a marginal impact.” To try and calm markets, “it’s possible that Governor Poloz may point to the still-soft wage data to reinforce his recent dovish tone, but more likely is a continued focus on the sources of growth and the perceived differences in economic slack vis-à-vis the United States,” he adds.

CIBC World Markets chief economist Avery Shenfeld highlights Canada’s momentum, noting, “Another month, another boat load of jobs for a Canadian economy that is showing plenty of momentum. […] If there was a fly in the ointment, it was that self-employment, rather than hiring, accounted for nearly all of the gains. But, paid employment is still up nearly 290K in the past year.”

On a provincial basis, he adds, “Alberta registered a solid gain in jobs in the latest month, although we treat the sub-national moves with caution given the limits of the sample size.”

Compared to a year earlier, the categories of full-time and part-time work have each increased 1.5%.

The country lost 2,400 positions in the services sector last month, but added 21,800 factory jobs thanks to the biggest month-to-month surge in manufacturing work since 2002. The manufacturing sector added 24,400 positions, mostly in Ontario and to a lesser degree in Alberta, to climb back up to the same level it was 12 months earlier.

Still, compared to its peak in the early 2000s, the manufacturing sector has about 630,000 fewer jobs, a drop of 27%, Statistics Canada said.

Alberta easily saw the biggest overall job boost among provinces, adding 20,700 full-time jobs last month. At the other end of the spectrum, Quebec shed 17,800 full-time positions.

When it comes to hours worked, chief economist and strategist Stéfane Marion, of National Bank of Canada, points to Alberta’s strength. In a research note, he says, “The March employment report showed […] total hours [worked] jumped 1.1% on the month, the biggest monthly increase since Canada emerged from recession in 2009. […] Hours are likely to continue catching-up to jobs in the coming months, even more so now that employment creation in Alberta is resuming […].”

The number of private-sector jobs rose 13,700 between February and March, while public-sector positions dropped by 12,700.

A consensus of economists had expected job gains of 5,000 last month and for the unemployment rate to increase to 6.7%, according to Thomson Reuters.

U.S. data

The U.S. March jobs report shows the country’s unemployment rate declined by 0.2 percentage point to 4.5% in March. Plus, the number of unemployed persons declined by 326,000 to 7.2 million, meaning both measures were down over the year.

The U.S. Labor Department says employment increased in professional and business services and in mining, while retail trade lost jobs.

Meanwhile, the labor force participation rate remained at 63% in March, and the employment population ratio, at 60.1% changed little. The employment-population ratio has edged up over the year, while the labor force participation rate has shown no clear trend.

The U.S. Bureau of Labor Statistics says total non-farm payroll employment edged up by 98,000.

In a note, TD Economics senior economist Fotios Raptis says, “There are some nuggets of good news tucked away in the details of this report: the household survey showed a reduction in all unemployment indicators, suggesting that labor market slack continues to be absorbed; and hourly wages advanced, while average hours remained broadly unchanged, all of which should help support consumer spending in the months ahead.”

Still, “this report will is unlikely to change the Federal Reserve’s calculus as they consider their next moves to tighten monetary policy,” he adds. “98k jobs is likely just above trend employment growth for an economy that is operating near full employment.”

Earlier this week, on Thursday, the U.S. Labor Department announced U.S. jobless aid applications fell to 234,000 last week. Josh Boak of the The Associated Press reported that it’s “a sign [that] the job market appears to be increasingly secure for workers.”

The Labor Department says weekly applications for unemployment aid plunged 25,000 to a seasonally adjusted 234,000. The four-week average, a less volatile measure, dipped to 250,000.

Further, over the past year, the number of people collecting benefits tumbled 7.2% to 2.03 million.