OTTAWA - The Canadian economy's ability to keep generating jobs was put the test in May, with employment gains slowing sharply to 7,700 after two straight months of massive increases.

Last month's more tame result was not altogether unexpected, given the country's economic growth rate slipped below two per cent in the first quarter.

Finance Minister Jim Flaherty said Friday the numbers were modest, but consistent with recent economic trends.

"Obviously I wish for stronger economic growth. We have to live with what we have. We planned on that basis — we weren't starry-eyed when we did the economic planning for the budget," he said.

"I am concerned (about) relative weakness in the U.S. economy. That is a concern for Canada."

Economists had anticipated a slowdown on the labour front, given that March and April saw an eye-popping 140,000 new jobs created, a 30-year high for a two-month period.

They had already pencilled in a employment pick up of only 5,000 jobs, the lowest expectation going into a Statistics Canada report in many months.

"I'm just relieved it wasn't an outright decline," said Doug Porter, Bank of Montreal's deputy chief economist.

"It's far from a surprise that we get a little bit of a slowdown in job creation, especially given what just happened south of the border," where jobs growth has also slowed significantly.

The small increase in Canadian employment was due to the addition of self-employed, government and part-time workers, which offset a decline in full-time employment in the private sector — potentially a sign that Canadian businesses were cautious about adding jobs.

It was not enough, though, to move the unemployment rate off 7.3 per cent.

The May jobs report was seen as an indication that the debt crisis and recessionary climate in Europe hadn't spooked Canadian employers yet.

Porter said there was reason to cheer that Canada's manufacturing sector posted a 36,400 jobs pick-up, and annualized growth rate for wages rose to three per cent from 2.3 per cent.

The factory gain was the sixth consecutive monthly increase, lifting jobs expansion in Canada's hard-pressed manufacturing sector to 3.3 per cent from last year, noted Derek Holt of Scotia Capital.

Still, there were several underlying weaknesses in the Statistics Canada report.

The main negative was that there were 15,600 fewer employees last month than in April, and the private sector shed 22,500 workers. As well, the number of new part-time workers outnumbered full-time by four to one.

Those numbers were mitigated by a rise of 23,300 in the self-employment category, which is usually a sign of labour market weakness. As well, government hiring rose by 6,900.

Looking down the road, news that Canada's trade performance returned to negative with a $367 million deficit in April following five months of surpluses, gives some evidence to the Bank of Canada's view that trade will be a weak contributor to the economy this year.

A report on hiring intentions by BMO issued after the jobs data suggests firms will be cautious about ramping up staffing levels going forward. The survey of employers found less than half — 46 per cent — saying they plan to hire this year.

The Canadian Labour Congress called on the Harper Conservatives to withdraw the proposed tightening to employment insurance coverage, given the softness of the numbers.

"If we are to believe the prime minister when he says that Canada's economic recovery remains very fragile — and the new data ... suggest we should — then this is the wrong time to bulldoze through with radical changes to a major economic program like EI," he said.

Analysts said the fresh data will likely have no effect on the Bank of Canada's thinking about interest rates. The central bank is likely to stay on hold for some time, they said, given the uncertainty about how events in Europe will unfold.

May's numbers brought job creation over the past 12 months to 203,000, consistent with an economy that is growing, but modestly. Almost all have been full time.

Besides the big gain in manufacturing, Statistics Canada said employment in education services also increased, by 25,700, and there were 10,700 more workers in the agriculture sector.

Offsetting the gains, construction shed 27,000 workers and employment in information, culture and recreation fell by 27,300.

Regionally, Quebec experienced the most job gains during month — 14,700 — and Ontario the biggest decline — 18,700. Alberta also saw a significant increase in employment with 9,800 net new jobs, dropping the province's unemployment rate to 4.5 per cent, which along with Saskatchewan is the lowest in the country.

British Columbia saw its unemployment rate jump to 7.4 per cent from 6.2, but only because there were 30,500 more people looking for jobs in the province in May.

7 IMPORTANT TRENDS IN CANADA'S JOB MARKET
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  • 7. Huge Regional Disparities

    Wood Mountain (includes oil rich Fort McMurray, pictured here) saw its employment level shoot up by 95% over the 2000 to 2011 period, while forestry based Miramichi suffered the biggest decline of 63% in job numbers.<br> <br> Two out of 33 Census Metropolitan Areas (Windsor and Thunder Bay) had fewer jobs in 2011 than in 2000 while 13 of 45 smaller cities were in this situation. In 2011, only 5.5% of the labour force in Wood Mountain were unemployed while 16.4% were unemployed in Miramichi.<br> <br> -- <a href="http://peoplepatternsconsulting.com/pub_can_job12.html" target="_hplink">People Patterns Consulting</a>

  • 6. Jobs Up, Wages Down

    The unemployment rate jumped from a near record low of 6.1% in October 2008 to a high of 8.7% high in August 2009 and has declined slowly since then to 7.2% in March 2012. In spite of the recovery, unemployment duration increased again in 2011.<br> <br> There was a another slight decrease in the number of discouraged job searchers in 2011, who just quit looking because they believed that nothing suitable was available, but their numbers were still 50% above pre-recession levels. Actual hours worked at all jobs advanced to 36.4 hours in 2011 up 24 minutes from the all-time low of 36 hours in 2009.<br> <br> Real (after removing inflation) average weekly wages fell by 0.5% in 2011 following an increase of only 0.2% in 2010. This helps explain why the number of workers who have more than one job climbed for a third straight year to a record 5.4% in 2011. Women (6.4%) are now more likely to have a second job than are men (4.5%) while both were the same (4.6%) in 1989.<br> <br> -- <a href="http://peoplepatternsconsulting.com/pub_can_job12.html" target="_hplink">People Patterns Consulting</a>

  • 5. Bad News For Working Parents

    In 2011, the employment rate for lone-parent mothers (55%), lone-parent fathers (79%) and mothers with an employed husband present (70%) all with children under the age of six continued to be below their prerecession peaks. The only exception in 2011 was for women with a non-employed husband for whom the employment rate (53%) was above the pre-recession rate.<br> <br> The "monetary" value of childcare remains undervalued. In 2011, childcare and home support workers working full-time (30 hours or more per week) earned an average of $598 per week. This was the third lowest behind full-time chefs and cooks ($545) and retail sales persons ($589). On a more detailed level, babysitters, nannies and parent helpers were the lowest paid occupation from among over 700 occupations in the 2006 Census.<br> <br> -- <a href="http://peoplepatternsconsulting.com/pub_can_job12.html" target="_hplink">People Patterns Consulting</a>

  • 4. Manufacturing Still Struggling

    After eight years of decline, the manufacturing sector created only 15,900 jobs in 2011. Employment in 2011 was about where it was in 1993 and down by 532,200 jobs since the peak in 2004.<br> <br> Based on employment growth over the 2000 to 2011 period, the most rapidly expanding industries in Canada were mining and oil and gas extraction (+70.3%) and construction (+56.4%). Other leading growth industries (all service related) included professional, scientific, technical services (+39.9%), health care and social assistance (+37.9%) and real estate and leasing (+30.1%). <br> <br> -- <a href="http://peoplepatternsconsulting.com/pub_can_job12.html" target="_hplink">People Patterns Consulting</a>

  • 3. Labour Shortages

    For 2011 as a whole, eight (35%) out of the 23 major occupations were in a shortage situation, compared to six occupations in the previous year but still much less than the 10 occupations before the recession began. When examined from an industry basis, there were shortages in five (25%) of the 20 sectors in 2011, up from four during the previous year. <br> <br> In 2011, the unemployment rate among professional occupations in health, nurse supervisors and registered nurses stood at only 0.8%. Unemployment was only 1.9% in technical, assisting and related occupations in health and in professional occupations in business and finance. Demographics point to more shortages in the medium-term.<br> <br> -- <a href="http://peoplepatternsconsulting.com/pub_can_job12.html" target="_hplink">People Patterns Consulting</a>

  • 2. Alberta - The Youth Job-Bringer

    Based on a ranking of 10 youth related indicators, Alberta was the best place for youth in 2011 followed by Saskatchewan in 2nd spot and Quebec in 3rd spot. Next in line were Manitoba (4th), Prince Edward Island (5th), British Columbia (6th), Ontario (7th), New Brunswick (8th), Newfoundland (9th) and Nova Scotia (10th).<br> <br> At the national level, recession is still the reality for youth. Youth employment plummeted by 195,400 jobs in 2009 and 2010 combined but only 19,300 jobs came back in 2011. In 2011, employment rates for all youth slipped further to 55.4% (lowest since 2000), was flat for returning students working in the summer (53.8%) but down a lot for full-time students who were working during the school year (36.6%). <br> <br> In 2011, the unemployment rate improved slightly for all youth (14.2%) but worsened for returning students working in the summer (17.4%).<br> <br> -- <a href="http://peoplepatternsconsulting.com/pub_can_job12.html" target="_hplink">People Patterns Consulting</a>

  • 1. A Greying Workforce

    More and more seniors are working longer. The percentage of those aged 60-64 who are employed rose from 34% in 1989 to 47% in 2011 ... a new record. The percentage of those aged 65-69 who are still working jumped from 11% in 1989 to 23% in 2011 ... another new record. The percentage of the 70 and over group who are still working increased to 6% in 2011 ... one more record high. <br> <br> Over the 1989 to 2011 period, the labour force aged 45-54 more than doubled (+108%), those aged 55-64 also more than doubled (+133%) while those aged 65 and older grew even faster (+180%). <br> <br> The recession delayed retirement for many, as record numbers of persons 60 and older remained in the paid workforce. The median retirement age among men (63.2 years) rose for a third consecutive year in 2011 and was the highest since 2003. The median age of retirement among women increased to 61.4 years in 2011 and is the second highest since 1994.<br> <br> -- <a href="http://peoplepatternsconsulting.com/pub_can_job12.html" target="_hplink">People Patterns Consulting</a>