Job creation in Canada returned to earth last month as employers pulled back following an apparent hiring binge in May that proved too good to be sustained.
Economists had expected payback from May’s purported growth of 95,000 jobs and they got it with Friday morning’s flat reading — actually a statistically meaningless loss of 400 jobs in June.
More meaningful was the decline of 32,400 jobs among full-time workers, offset by similar-sized gains in part-time jobs.
That left the unemployment rate at 7.1 per cent, where it was in May and at the start of the year.
Bank of Montreal chief economist Doug Porter said the June report should be a reminder to markets and analysts to look through the volatile monthly data for a true picture of labour conditions and give greater credence to the three-month and six-month rolling averages.
Over the first half of 2013, the economy created an average of about 14,000 jobs a month, about half the pace of growth seen in the second half of 2012.
“As a stand-alone report, June looks pretty sickly but given the massive, near-record job gain in May it’s actually mildly encouraging that strength was maintained,” Porter said.
“I do think the bigger picture is that job growth did slow in the first half of the year and that gives a more accurate picture of what happened in the Canadian job market, not these wild (swings),” he said.
“And the unemployment rate is 7.1 and it was 7.2 per cent a year ago and that tells us there’s been precious little improvement, but there is a little improvement.”
Markets reacted swiftly to the data, however, dropping the loonie half a cent to 94.55 US both on the soft Canadian data and an above consensus 195,000 jobs gain south of the border.
May aside, the jobs data has been in line with an economy that has seen weak growth through the first half of 2013.
However, analysts are expecting the second half of 2013 to show some improvement, and the U.S. labour report, also released Friday morning, gives some hope that the American economy is picking up steam. That would be good news for Canada, particularly the export sector, analysts say.
The details in the latest Statistics Canada report were also in keeping with the theme that an adjustment was due.
Besides the drop in full-time work being offset by part-time, private sector employment slipped by 5,300 amid small gains in the public sector and in self-employment.
As well, hours worked dipped 0.2 per cent and hourly wages slipped slightly to 2.2 per cent growth from last year.