After weathering a brutal downturn that knocked hundreds of thousands of Canadians out of the work force, Central Canada’s job machine is back and revving into high gear.
The country’s remarkable rebound from recession gained momentum in June, as surging job growth in Ontario and Quebec underpinned an increase of 93,000 jobs and unemployment fell below 8 per cent for the first time since early 2009, Statistics Canada reported.
Ontario produced 60,000 jobs in June, and Quebec added 30,000, as employment soared in the services sector, including gains in retail, health care, trade and building services.
Importantly, the June jobs report showed the private sector continues to pick up the baton from the public sector, which has long supported the economy with a massive stimulus spending package on the order of $62-billion.
The private sector has accounted for more than 246,000 new jobs over four months, a welcome trend for Canadian policy makers who have long urged companies to take the lead on economic growth as government stimulus spending tapers off in the second half of this year.
The stunning employment gain was close to the highest on record, second only to an increase of about 109,000 jobs two months earlier. The June hiring brought the combined total of new positions created since last July to 403,000, restoring most of the jobs lost during the recession. The jobless rate dropped to 7.9 per cent from 8.1 per cent.
“The jobs picture clearly shows that the Canadian recovery hasn’t stalled yet,” said Benjamin Reitzes, an economist with BMO Capital Markets. “The handoff from public to private spending looks to be going smoothly.”
The jobs report, far stronger than expected, also lays the groundwork for another interest-rate hike later this month, following a quarter-point increase by the Bank of Canada in early June, economists said. The quickly improving jobs picture, along with rising interest rates, stands in sharp contrast with the still-sluggish economy south of the border. Only a fraction of the more than eight million jobs lost in the United States between late 2007 and late 2009 have been restored, while the U.S. Federal Reserve shows no sign of raising its near-zero interest rates any time soon.
