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Monday, July 9, 2012

Canada's economy adds 7,300 jobs in June

TORONTO: Canada's unemployment rate inched down to 7.2 per cent in June as employers added 7,300 new jobs, Statistics Canada reported Friday.

The reporting agency said the jobless rate fell from 7.3 per cent in the previous month to 7.2 per cent in June as full-time jobs increased by 29,300 and part-time employment fell by 22,000 positions.

In addition, the number of hours worked increased by 0.4 per cent and hourly wages rose 3.4 per cent on an annual basis, up from May's 3 per cent.

It was the second month in a row that Canada saw minimal job gains after two stunning months - March and April - when the economy added 140,000 jobs, the biggest two-month gains in over 30 years. May saw an addition of 7,700 jobs.

Despite the size of the earlier increases in March and April, analysts still said it is good news that the gains were confirmed by May and June's numbers, rather than reversed.

"I'm never going to complain about a dip in the unemployment rate, and we did have a solid increase in hours worked in the month and the second quarter as a whole, which in some ways is almost a better measure," said Doug Porter, deputy chief economist with BMO Capital Markets.

"People were working longer hours and getting paid more for their efforts," he added, which should support consumer spending.

Economists said Canada's jobs picture remained superior to that in the United States, which reported disappointing job gains of only 80,000 in June. That kept the jobless rate in the U.S. at 8.2 per cent - a full point above Canada's.

Given the gloomy overall global backdrop, Jimmy Jean of Desjardins Capital Markets called the Canadian employment result fair, noting that it could have been much worse.

Jean said that the June employment numbers probably will have few implications for the Bank of Canada's interest rate policy.

The Canadian central bank had signaled in April that it was considering raising rates but has since softened its tone. Analysts say a rate increase from the Bank of Canada appears to be on hold for some time to come, with some looking as far into the future as 2014.

Economists had predicted a tight job market in June given flagging consumer and business confidence picked up in recent surveys.

Most of the gains last month occurred in the public sector, which saw a large 38,900 gain, while the private sector shed 26,000 jobs. Self-employment fell by 5,500.

Statistics Canada said the biggest gains were in business, building and other support services, where employment rose by about 24,000. Health care and social assistance added 20,000 and there was a gain of 19,000 in educational services.

Offsetting the employment gains, the number of workers in the information, culture and recreation fields fell by 31,000, while there were 20,000 fewer agricultural workers in June. There were also minor declines in construction and manufacturing.

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