In this month Canada Recorded Employment Gain of 12,500

Volatility in employment continued in April with a mild 12,500 increase following the sharp 54,500 jobs lost in March and 50,700 rise in February. The unemployment rate held at 7.2% remaining in the range established since November. The sources of strength in the report were manufacturing, professional and technical services, finance, insurance, real estate, health care, and public administration. In total, private employment dropped by 20,000 while public-sector employment rose by 34,200 and self-employment was little changed. Year to date, private-sector payrolls have fallen by 95,000 while the public sector has expanded by 9,000. Encouragingly, the gains in April were concentrated in full-time employment, which increased by 36,000 and partially offset the sharp 54,000 drop recorded in March. Part-time employment conversely dipped by 23,600 in April.

Manufacturing employment posted its largest one-month gain since May 2012. The increase was the first since December. Construction employment was steady in April, and year to date, there have been 24,000 jobs created. Transportation and warehousing, and retail and wholesale trade recorded job losses of 20,700 and 15,800, respectively. The pace of increase in hourly earnings for permanent employees (the Bank of Canada's favoured measure) picked up to 2.8% from an average of 2.1% in the first quarter. Hours worked recovered and increased 0.3% in April, almost fully offsetting March's 0.4% decline.

The largest gain was recorded in Alberta while Manitoba and New Brunswick saw employment decline. Despite rising in April, Manitoba's unemployment rate was 5.8%, still well below the national average. Saskatchewan retained the title of having the lowest unemployment rate at 4.0% while Alberta's unemployment rate fell to 4.4%. In Ontario, employment rose by 3,800, and the unemployment rate held steady at 7.7%.

After a weak first quarter of 2013 for hiring, April's gain started the process for a recovery of the 25,700 jobs lost in the quarter. Our monitoring of the economic data indicates a pick up in the pace of economic activity with real GDP on track to record a 2.3% annualized gain in the first quarter, which would be much quicker than the sub-1% growth rates recorded in the second half of 2012. This would also exceed the pace that the Bank of Canada projected in its April forecast. Additionally, the mild recovery in job growth in April sets the stage for the economy to continue to grow at close to its potential rate. Having said that, this pace of increase will not be sufficient to dent the excess capacity significantly in the economy; however, we expect that economic growth will accelerate further and be supported by low interest rates and a strengthening in the US economy.