June saw the Canadian economy add 45.3k net jobs. More Canadians joined the labour market, but the strong job gains were enough to offset this impact, leading the unemployment rate a tick lower, to 6.5%.
Job gains were concentrated in part-time positions, up 37.1k, while full time work added 8.1k net jobs. The employee/self-employed mix was nearly half-and-half, as 23.9k net employment positions were added, versus a 21.4k gain in self-employment.
The private sector led the gains in employees for a second month in June, adding 17.8k, while the public sector created a net 6k positions.
June saw fairly wide-spread gains in employment across the major sectors. On the goods-producing side of things, 16k positions were added, led by agriculture (+12k), with more modest gains reported across most of the other categories. Among the service-producing industries (+29.2k), professional services led the way (+27k), offset somewhat by declines in business support services (-15.1k) and transportation (-7.4). Modest job gains were seen in most of the other major service sectors.
Looking across the country, Quebec and B.C. led the charge, adding 28.3k and 19.7k respectively. Among the remaining provinces, it was a mixed bag of generally flat performances, excluding Alberta, which added 7.5k net jobs in June.
Aggregate hours worked ticked up somewhat in June, up 1.4% year-on-year. Continuing the trend that has emerged this year, hourly wage growth remained soft, rising just 1.0% year-on-year.
Key Implications
The Canadian economy again defied expectations, turning in another month of solid job gains. While the employment mix was heavy on part-time job gains, another tick higher in the participation rate, and a decent expansion of hours worked were both encouraging to see.
If there is a fly in the ointment, it is again the stubborn lack of wage pressures despite solid job gains (+186k year-to-date, driven entirely by full-time work) and a robust economic backdrop.
Further, hiding beneath the solid figures are regional divergences, with soft employment figures (including wages) in Ontario adding the list of concerns, particularly given recent moves in housing markets and the province’s reliance on real estate as a driver of growth.
Today’s jobs figures are the last major piece of economic data before the Bank of Canada’s interest rate decision on Wednesday (June 12th). However, this report is unlikely to carry much weight on their decision, given it continues the trend of robust job gains, and the weak wage backdrop was present ahead of the change in communication strategy last month.
Indeed, a sharp hawkish swing in the tone of communication in June, further reinforced this week, suggests that despite a lack of inflationary pressures (let alone a ‘bottoming out’ of inflation), the Bank’s policy interest rate is going up, and the market has already braced for this by pricing in a hike for next week.
