Canadian economy creates 42,900 new jobs in March

Canada’s economy showed signs of thawing out from a long, bitter winter last month, churning out an unexpectedly high 42,900 net new jobs that helped shave the unemployment rate to 6.9 per cent – matching a post-recession low.

The Canadian jobs gain, although mostly part-time, was about double what economists had anticipated and more than wipes out February’s 7,000 dip.

The loonie gained ground after the announcement. It had been at 90.69 cents US about an hour before the Canadian and U.S. government jobs reports were released, and rose to 91.2 cents US shortly after.

At 6.9 per cent, the Canadian jobless rate matches the lowest point it’s been since the 2008-09 recession. The employment increase did not budge the participation rate from 66.2 per cent, however, as more Canadians began looking for work in March.

The other surprise in the Statistics Canada report was that the vast majority of the new jobs last month (32,500) went to young Canadians in the 15-24 age group — a group that has mostly been left behind during the recovery.

Statistics Canada said over the past 12 months that employment in Canada has risen by about 190,000 and the number of hours worked by 1.1 per cent.

If there was a soft spot in the Statistics Canada report, besides the preponderance of part-time work, it was that almost all the new jobs were in the public sector, while new private sector hiring was limited to 3,900. New part-time jobs outnumbered full-time 30,100 to 12,800.

Still, the March numbers will be seen as positive to the economy, which had been having difficulty gathering momentum during the unusually cold winter. Prior to March, the previous three months had seen a net loss of almost 22,000 jobs.

Most economists believe the unseasonably cold weather both in Canada and the United States, particularly in December, has had a dampening effect on growth in both countries during the winter months.

The U.S. Labor Department reported Friday that U.S. employers added 192,000 jobs in March, but the unemployment rate was unchanged at 6.7 per cent. The American March jobs numbers were slightly below February’s total of 197,000, but the U.S. Labor Department also said 37,000 more jobs were created in February and January than previously estimated.

The Canadian economy depends heavily on trade with the United States, and improved employment numbers for Americans is considered an important factor in advancing a lacklustre recovery from the last recession.

The expectation is that Canada’s gross domestic product growth will be restricted to about 1.5 per cent in the first quarter of 2014 – about one percentage point below previous expectations.

But analysts are also expecting a strong bounceback as the winter effect subsides, and March’s numbers is some evidence that the outlook for a stronger second quarter may be on the mark.

The agency said all the new jobs went to the services sector, mostly in the health care and social assistance category, as well as in business, building and other support services. Meanwhile, the goods producing sector shed almost 16,000 jobs, with agriculture and manufacturing both experiencing employment losses.

Regionally, most of the new jobs went to Canada’s most populous provinces, with British Columbia adding 18,300, Quebec 15,100 and Ontario 13,400. There were minor job losses in Alberta, Manitoba, Nova Scotia, Newfoundland and Prince Edward Island.