NEWS

Harper encouraged by jobs boost

05/11/2012 10:25 EDT | Updated 07/11/2012 05:12 EDT

Prime Minister Stephen Harper says job growth over the past two months shows that his government's economic stewardship is working.

Canada's economy added 58,200 mostly full-time jobs in April, almost six times what economists had forecast.

It was the second month in a row that employment grew, following a jump of 82,300 in March, and far exceeded the 10,000 jobs that economists had forecast for April.

Harper says the news is encouraging, but he adds that he doesn't want Canadians to become complacent.

He says challenges remain for the global economy, and he called on Parliament to pass the government's budget measures.

The financial news service Bloomberg called it Canada's largest two-month increase in more than 30 years.

Despite the unexpected surge in new jobs, the unemployment rate rose slightly, from 7.2 per cent to 7.3 per cent, as improving job prospects encouraged more people to look for work. That raises what economists call the participation rate, or the share of Canadians working and looking for work.

Net job creation is running above its long-term average.

Over the past six months, the economy has created about 26,000 jobs per month, compared with an average of 20,000 per month going back to 2002.

All the same, the share of adult Canadians with jobs continued to sit at more than a full percentage point below its 10-year average of around 63 per cent, according to TD Economics.

Statistics Canada said employment rose 1.2 per cent, or 214,000, from the same month a year earlier. All of the growth over the 12 months was in full-time work, while part-time employment was unchanged.

If confirmed in subsequent months, the pace of jobs growth might give Bank of Canada governor Mark Carney one more reason to carry through on his signal last month that the time for modestly raising interest rates was approaching.

But some analysts still believe Carney will remain on the sidelines throughout 2012, given the instability of the global economy, particularly in Europe. There is also concern the economy may not be able to produce such sizable gains in the near future.

"With this report, the lull of last winter has been all recovered and employment is right back to its trend. Thus, further improvements of this size are highly unlikely," said Jimmy Jean, economic strategist with Desjardins Economic Studies.

Following March's mammoth gains, analysts had expected only modest movement in employment this month. Instead, April turned out to be almost as strong, and even stronger in the details.

And unlike the previous month, when most of the new jobs were concentrated in Central Canada, this time the gains were spread across the country with employment rising in the Atlantic region, Quebec and the West, although Ontario, Nova Scotia and Manitoba suffered minor job losses.

Also impressive was that most new workers were full time and all were in the private sector, as well as being new hires rather than in the softer self-employment category.

In fact, the number of employees rose by 66,600 and the private sector added 85,800 as government jobs fell by 19,200.

Wage gains muted

Wage gains were muted, with average hourly earnings for permanent employees rising by 2.4 per cent from the same month last year, and down from a 2.5 per cent year-over-year increase in March.

"Wow. Where did this come from?" said Bank of Montreal economist Doug Porter. "It's almost like Canada is a bit of an island in terms of good economic data recently."

Porter pointed out there has been something of a reversal in the jobs picture between Canada and the United States in the last two months, with the labour market strengthening north of the border but softening in the U.S.

Over the past year, Canada has added 214,000 new jobs.

By industry, Statistics Canada said construction added the most workers, 24,600, followed by manufacturing, 23,800, welcome news in an export-dependent sector that has been struggling due to weak foreign markets and the high Canadian dollar.

Other gainers in April included natural resources, 11,000; agriculture, 10,000; and education services, 17,000.

Offsetting the gains, public administration shed 32,400 workers, likely an indication of government restraint.

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