Losses in April extend slump in job creation

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Canada's job engine is sputtering as government fiscal restraint and caution in some parts of the private sector weigh on hiring.

Employers unexpectedly shed 28,900 jobs last month, led by a drop in full-time positions and at private companies, according to Statistics Canada. The Canadian dollar tumbled sharply on the news.

Employment numbers have yo-yoed in recent months and growth has generally been tepid since last August. On average, employers have added just 3,100 jobs a month over the past half year, compared with an average of 23,300 in the previous six months.

The report was "disappointing," said Emanuella Enenajor, senior Canada economist at Bank of America-Merrill Lynch, adding that Statscan's separate payrolls survey also points to a hiring slowdown. "Not only were today's numbers weak but the broader trend is weak."

The country's unemployment rate stayed at 6.9 per cent in April as fewer people sought work. And the employment rate – or the employment-to-population ratio, which some economists use as a barometer of the labour market's health – ebbed to 61.5 per cent, the lowest level since March 2010.

All told, job creation "is failing to keep up with population growth and the employment rate is back near the lows hit in the wake of the recession," noted David Watt, chief economist at HSBC Bank Canada.

Wage growth softened, suggesting restrained consumer spending is in store. Hourly wage growth for permanent workers eased to about 1.6 per cent from a year earlier, down from the previous pace of 2.4 per cent in March.

Growth in part-time positions is outpacing full-time employment, with part-time work up 2.4 per cent in the past year compared with 0.5-per-cent growth in full-time jobs.

Taken together, these factors show "reasons to be concerned about employment quality," Ms. Enenajor said.

The jobs report is just as notable for what it doesn't contain. More than 1.3 million Canadians are out of work, but as the auditor-general noted this week, it's difficult for job seekers to know just where the jobs are.

Existing job vacancy data lack details at the municipal and occupational level, the report said, while Statscan's survey of payrolls, employment and hours also lacks details at the sub-provincial level. Budget cuts appear to be playing a role.

The Conservative government said this week it is working with provinces and postsecondary institutions along with Statscan to improve labour market information.

Last month's job declines were in accommodation and food, along with the finance sector. Compared with last year, employment is lower in agriculture, public administration, construction and education. It has grown in health care, utilities, natural resources and transportation.

Some employers have recently announced job cuts. Unilever Canada said this week it will close a Brampton, Ont., plant that makes dry soups and sauces, a move that affects 280 jobs. Teck Resources Ltd. is trimming headcount, as are Shaw Communications and the CBC.

Regional differences remain. Saskatchewan's jobless rate, at 3.4 per cent, is the lowest since record-keeping began in 1976 and the lowest in the country. Newfoundland has the highest unemployment rate at 12.1 per cent.

Jobs numbers tend to be volatile, and monthly readings should taken with a grain of salt.

Timing can also throw off the numbers. Last month's labour force survey was conducted in the same week as Good Friday. That, and vacation time around the Easter holiday, caused a slide in the number of hours worked.

Canada's unemployment rate was unchanged at 6.9 per cent in April as fewer people sought work, Statistics Canada said Friday.