Canada adds 93,200 jobs in June

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Canada's jobs machine went into overdrive last month, leaving the United States and most other advanced economies in the dust.

Statistics Canada said Friday that the economy had created a whopping 93,200 new jobs in June - almost all in Ontario and Quebec and all in the services sector.


Canada's jobs machine went into overdrive last month, leaving the United States and most other advanced economies in the dust.

Statistics Canada said Friday that the economy had created a whopping 93,200 new jobs in June - almost all in Ontario and Quebec and all in the services sector.

That took the country's unemployment rate below eight per cent for the first time since the depths of the recession in January 2009, falling to 7.9 per cent.

That is in contrast to the 125,000 jobs lost in the United States last month and flat readings through most of the Group of Seven countries, which originally comprised the world's largest industrialized economies before the evolution of China, India and several other countries emerged as new economic powers.

The Statistics Canada report was so strong that some economists scrambled for superlatives, and even raised some questions about whether it might be a result of a sampling error.

"That was a shocker for sure," said Derek Holt, vice president of economics with Scotia Capital. "I am skeptical that Canadian businesses are so optimistic that they would be heaping on jobs at this stellar rate."

Holt said the household survey, like all polls, are subject to an "outlier" sample.

However, he said without evidence to contradict the result it would "take a heck of a lot of fancy footwork by the Bank of Canada to dance around a rate hike on July 20."

Many expect bank governor Mark Carney to boost the central bank's key rate one-quarter point to 0.75 per cent - still a low level by historical standards.

The Canadian dollar took off after the jobs report. It was up 1.06 cents from Thursday's close, rising to 96.85 cents US at midday.

The wow-factor of the employment growth - particularly after April's 109,000 gain - also grabbed attention south of the border.

The popular U.S. website Huffington Post appeared to take delight in contrasting Canada with the United States, offering its readers an online poll on whether they would be willing to relocate to their "polite neighbour" for work. Surprisingly, more than half of the early response was yes.

On a more serious note, Carl Weinberg of U.S.-based High Frequency Economics said the report supports the Bank of Canada's view that the jobless rate could return to a level that's low enough to boost wages and inflation.

"The difference between us and them is that we do not believe this strong employment growth can last," Weinberg said.

According to Statistics Canada, the economy has managed to create 227,000 new jobs in the past three months, and has now all but replaced the jobs that were lost during the 2008-2009 recession.

But the agency said the unemployment rate remains well elevated above the 6.2 per cent that existed in October 2008 because many more Canadians have since joined the labour force.

There were a number of surprises in the Statistics Canada report, including a few notable weaknesses.

Economists had expected a modest pick-up of between 15,000 and 20,000 added jobs because several economic indicators, including retail sales, exports and building permits, have been weak since March.

There was more evidence of slowing economic growth Friday. Canada Mortgage and Housing Corp. said its seasonally adjusted annual rate of housing starts slid 3.1 per cent from May, although that followed upwardly revised numbers for previous months.

The other surprise in the employment report was that the jobs were all concentrated in Ontario and Quebec, despite the fact that the manufacturing sector actually shed workers during the month.

Ontario gained 60,300 workers, slicing the unemployment rate in Canada's most populous province by 0.6 points to 8.3 per cent.

Meanwhile, neighbouring Quebec gained 30,400 new jobs, bringing its unemployment rate to 7.8 per cent.

These improvements were accomplished without any help from the manufacturing sector, a mainstay in both provinces, as factories shed 14,300 jobs overall in June.

All of the new jobs were in the services, including retail and wholesale trade, business building and other support services, health care, social assistance and other services, such as auto repair and personal care.

The agency said the new jobs were split between full-time and part-time, with more than half private sector.

There was also a big increase in student employment - 63,000 more last month than was the case in June last year. At the time, there were only tentative signs that the economy had begun to turn up after the worst recession in decades. However, there were 10,200 fewer working in the goods producing industries last month, with losses in the factories sector leading the way.

Organizations: Statistics Canada, Bank of Canada, Group of Seven Scotia Capital High Frequency Economics Canada Mortgage and Housing

Geographic location: United States, Canada, Ontario Quebec OTTAWA China India

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Recent comments

  • james
    July 20, 2010 - 13:02

    most of the jobs that were created are job you exist on service sector jobs plus the 20000 that were hired for the riot upalong

  • Phoebe Tilley
    July 20, 2010 - 13:02

    Well James maybe we need a roit here in NL to creat some jobs God knows Danny hasent created any. Theres an idea protest at Confederation Building. Then again Danny probably has a Quebec security firm on standby they seem to get many of our jobs anyway.