OTTAWA – The Canadian economy churned out an additional 21,600 jobs last month, the most since August, although almost all the new workers were part-time and the unemployment rate continued to sit at 6.9 per cent for the third straight month.
The headline increase in employment was almost twice of expectations, but analysts judged the details of the report soft and indicative of a slow-growing economy.
“The jobs created in November is clearly positive,” said TD Bank chief economist Craig Alexander.
“But if you look at the year, you get a different perspective… and when we look at the composition, it takes a little bit of the shine off the performance.”
Along with the overwhelming preponderance of part-time jobs, most of the gains came in the self-employment class, which on average earns less. November saw a net increase of 19,100 self-employment jobs, while employers only added 2,500 to their workforce.
Statistics Canada noted that even with the bigger than expected gain last month, job creation in Canada has settled at an average 13,400 per month so far into 2013, compared to an average of 25,400 for the same 11-month period in 2012.
Economists also noted that aggregate hours worked actually fell somewhat during the month.
Finance Minister Jim Flaherty told reporters at a Toronto-area event that “overall, the trend is good.”
But markets seemed more impressed with the U.S. labour report. The U.S. unemployment rate dropped to seven per cent for the first time since the recession after 200,000-plus jobs were added in November.
That is potentially good news for Canadian workers down the road, said Alexander, because a stronger U.S. economy is expected to boost demand for Canadian exports.
The Canadian dollar slipped 0.09 of a cent to 93.89 cents US as the two reports were released simultaneously, and the greenback advanced and bond yields rose.
The Canadian unemployment rate has dropped 0.3 percentage points over the past year, the agency pointed out, due in part to the fact that the labour force grew at a slower pace than population as a whole.
“The longer-term trend is still that Canadian employers are creating barely enough jobs to keep pace with population growth,” said labour economist Erin Weir of the United Steelworkers union.
“Tellingly, the employment rate — the proportion of working-age Canadians who are employed — is lower today than a year ago,” he added.
Analysts believe the economy needs to create close to 20,000 new jobs each month just to keep up with the growth in the labour force, so the pickup this year suggests an economy that is growing, but below potential, a view that is shared by the Bank of Canada.
Earlier this week, the central bank maintained its accommodative one per cent interest rate pointing out that the persistently low inflation rate in the country suggested continued and significant economic slack.
There were a few bright spots in the weeds of Friday’s labour report. The most notable was the oversized increase of 51,000 new workers in the private sector, a figure that includes part-timers and self-employed. That continues a trend over the past year that has seen almost all the job gains in the private sector.
Meanwhile, the public sector lost about 29,000 jobs during the month.
As well, the agency said employment in the troubled and key manufacturing sector rose by 24,600, although factory jobs are still down 44,000 from a year ago.
Other gainers were the business, building and other support services, which saw 31,000 more workers, and employment in the information, culture and recreation industries rose by about 16,000.
Offsetting the increases, construction and public administration each lost about 18,000 workers in November.
It was also a poor month for youth, with employment in the 15 to 24 age group declining by about 26,000, while all other age categories saw increases.
Regionally, Ontario added 13,800 jobs and Alberta 10,600, while Newfoundland and Labrador lost about 2,600 workers. Other provinces experienced only minor changes relative to their populations.