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Canada’s unemployment rate unexpectedly fell in June as employers added jobs for a fourth consecutive month and increased wages at the fastest pace in almost three years.
Employment rose by 7,300 in June, Statistics Canada said today from Ottawa, and the jobless rate dropped to 7.2 percent from 7.3 percent in May. Economists projected no change in the unemployment rate and a 5,000 gain in employment, according to the median in a Bloomberg News survey.
The data add to evidence the world’s 10th largest economy may have picked up momentum in the second quarter, following a slowdown that began at the end of last year, with Canada adding 155,500 jobs since February. Those gains may be short-lived if the U.S. labor market doesn’t make more progress, said Camilla Sutton at Bank of Nova Scotia. (BNS) The U.S. Labor Department also released payroll numbers today that showed employers hired fewer workers than forecast in June.
“It’s going to be very difficult for Canada to hold up these job gains with what is happening in the U.S.,” Sutton, head of currency strategy at the Toronto-based lender, said in a telephone interview. “The focus is on the U.S.”
U.S. payrolls rose 80,000 last month, Labor Department figures released today show, less than the 100,000 gain projected by economists.
Finance Minister Jim Flaherty said that while the report is a positive sign for the Canadian economy, too many people remain unemployed.
“From the United States to Europe, the global economy remains fragile and too many Canadians are still looking for work,” Flaherty said in a statement sent by e-mail from his office.
The Canadian dollar fell 0.5 percent to C$1.0197 per U.S. dollar at 11:56 a.m. in Toronto. One Canadian dollar buys 98.07 U.S. cents. Bonds rose, with the yield on the benchmark 2-year government note falling to 0.99 percent from 1.03 percent yesterday.
Canada’s economy expanded at an annualized pace of 1.9 percent over the past two quarters, after averaging 3 percent growth since the country emerged from its recession in 2009.
Swaps trading suggest investors are pricing in a 31 percent chance that Bank of Canada Governor Mark Carney will lower borrowing costs by at least 25 basis points this year.
Government-related employers led gains for a second month. Education added 19,300 workers in June, while health care payrolls climbed 19,900. Public sector employment has increased 45,800 over the past two months, while private employers have cut 48,500 jobs.
Full-time jobs increased by 29,300 in June, Statistics Canada said. Part-time employment fell by 22,000 positions.
Goods-producing industries fired 21,200 workers during the month, with manufacturing recording its first decline since November 2011. Factories have generated about half the country’s job gains since February.
Construction, natural resources and agriculture also posted declines in June.
Total payroll employment rose by 12,800 positions in June while self-employment fell by 5,500, Statistics Canada said.
Average hourly wages of permanent employees rose 3.3 percent in June from a year earlier, faster than May’s 2.9 percent pace and the highest since August 2009.
Statistics Canada also reported that Canadian building permits rose 7.4 percent to C$7.03 billion ($6.92 billion). Economists surveyed by Bloomberg News forecast a drop of 1 percent, according to the median of nine estimates.
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