The Canadian economy added a record 106,500 jobs in April, Statistics Canada said on Friday, a timely boost for Prime Minister Justin Trudeau, who trails in opinion polls less than half a year before the October general election.
The April gain far outstripped analysts’ expectations of 10,000 jobs. The unemployment rate declined to 5.7 per cent, the lowest since December, from 5.8 per cent in March. Analysts in a Reuters poll had forecast 5.8 per cent.
The job gain was led by employment increases in the two most populous provinces, Ontario and Quebec, important battlegrounds in the upcoming vote.
“Since 2015, we’ve been investing in you to create more jobs and grow our economy,” Trudeau said on Twitter. “And that plan is working – over 1,000,000 Canadians now have jobs compared to four years ago.”
The Conservative Party currently leads Trudeau’s Liberal Party by almost three percentage points, a Nanos Research poll showed earlier in the week. Trudeau’s support has taken a hit this year, in part because of a party scandal over alleged interference in a corporate corruption case.
The Canadian dollar rallied on the back of the jobs report to 1.3400 against the U.S. dollar. However, since not all of Canada’s recent economic data has been so positive, the jobs figures are not likely to change the Bank of Canada’s current neutral stance on interest rates, analysts said.
The central bank has raised rates five times since July 2017, but late last month it held interest rates steady and removed wording around the need for future hikes, while lowering its growth forecast for 2019.
“(Bank of Canada Governor Stephen) Poloz is going to stay on the sidelines for a little bit here,” Andrew Kelvin, chief Canada strategist at TD Securities, told Reuters. “Any speculation around them switching back to a tightening bias would be premature.”
Canada’s economy stalled in February, and a survey released last month showed business sentiment has turned slightly negative as a result of a weak energy sector, a housing slowdown, and global trade tensions.
The average year-over-year wage growth of permanent employees – a figure closely watched by the central bank – was 2.6 per cent in April, the highest since August 2018 and up from 2.3 per cent in March.
“There’s nothing in the inflation rate pushing the Bank of Canada to hike. These wage numbers won’t do it,” Nathan Janzen, a senior economist at the Royal Bank of Canada, told Reuters. “We still don’t have any moves through 2020.”
Ontario added 47,000 positions and Quebec 38,000, with the unemployment rate in Quebec at 4.9 per cent, the lowest since 1976, when comparable employment data was first collected, Statscan said.
Separately, the value of Canadian building permits rose 2.1 per cent in March, driven higher by construction plans in the four Western provinces, after falling a revised 5.1 per cent in February, Statscan said.
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