- An impressive 106.5k additional Canadians were working in April – the largest single monthly gain on record, and nearly an order of magnitude above market expectations. The unemployment rate fell only a notch to 5.7% as the participation rate rose.
- The composition of the gains was as impressive as the headline. Gains were largely full-time (+73.0k), largely private sector (+83.8k), and entirely in employees (+106.5k). Self-employment was unchanged.
- Leading the charge were the construction industry, adding 29.2k net positions after four months of declines, and retail and wholesale trade, where 32.4k net jobs were added.
- Regionally, it was again Ontario (+47.1k) and Quebec (+37.9k) in the driver’s seat, but it was also encouraging to see a relatively solid 21.4k net positions added in Alberta.
- Wages for permanent employees were up 2.6% year-on-year basis, in the fifth month of acceleration. Total hours worked were up 0.4% month-on-month, finally breaking through their prior, November peak.
- With the impressive headline addition, the six month trend rose to 51.4k – the strongest it has been since 2002.
Key Implications
- Wow. This was by and large a solid report. Nearly every indicator of quality came in strong this month: the best-ever gain came with solid full-time job growth, all in employees (rather than self-employed), more Canadians were drawn into labour markets, and wages were up. Chalk this one up as a solid message that employers still have faith in the Canadian economy.
- If there is an area that raises questions, it is again hours worked. Despite the nearly 107k jobs added (i.e. a 0.6% monthly rise), and the 88k full-time positions therein (+0.5%), total hours worked were up only 0.4% in April. This suggests that, as strong as the headline looks, the implication for growth may not be as robust.
- Indeed, while we are not going to complain about the jobs numbers of late, their strength is a bit of a mystery when other economic indicators paint a more modest picture of the Canadian economy. The result over the past few years has been an absence of productivity gains, likely compounded by the lackluster investment numbers. It appears likely that this disconnect resolves itself through a more modest pace of hiring as the year progresses, alongside a recovery of economic activity. However, as today’s data demonstrates, expect a few surprises along the way.
