A temporary foreign worker packages mushrooms at the Highline Mushrooms farm, Canada's largest mushroom grower, in Leamington, Ont., April 14, 2016.MARK BLINCH/Reuters
Canada's labour market eased in April owing to another round of job losses in Alberta and steep declines in the manufacturing sector.
Alberta lost a net 21,000 jobs, with nearly every part of its economy taking a hit from the weak oil prices and shrinking energy industry.
More losses are expected as the province grapples with a fire that is devastating Fort McMurray, the heart of the oil sands. The fires have destroyed neighbourhoods and businesses, putting even more Albertans out of work as residents are evacuated from the area.
"We expect the downtrend to continue given the disruption to the energy sector caused by wildfires," said Matthieu Arseneau, senior economist with National Bank Financial.
Alberta's jobless rate rose one notch to 7.2 per cent in April, surpassing the national average of 7.1 per cent, according Statistics Canada's monthly jobs report released on Friday.
Over all, Canada shed a net 2,100 positions, missing expectations for a small job gain. But the small loss, which Statscan equates to zero, comes after the country created 41,000 jobs in March.
"Canadian jobs surged in March, so the labour market could be forgiven for taking a breather in April," said Nick Exarhos, economist with CIBC, in a research note.
The services sectors created 35,000 new positions, with gains in trade and accommodation and food services.
But the country lost 16,500 factory jobs, the second consecutive month of losses. Employment in the sector has now contracted to its lowest level on record.
"It's not looking good," said Charles St-Arnaud of Nomura Securities. "It's a sharp reversal of the increase that we saw in late 2015," he added.
As a proportion of total employment, manufacturing now accounts for 9 per cent of all employed persons compared with 10 per cent at the end of 2009 and about 20 per cent in the 1970s.
The low factory employment comes after a report showed manufacturing sales slipping more than expected in February. Since December, 52,000 factory jobs have vanished, with Alberta responsible for about half the losses.
"The declines over this period were mostly the result of contraction in Alberta's manufacturing industries, but also due to general weakness observed in manufacturing across almost every other province," said Andrew Fields, labour analyst with Statistics Canada.
British Columbia was one of the bright spots in the jobs report. The province created 13,000 new positions and its unemployment rate decreased to 5.8 per cent, the lowest in the country. The province's economy is forecast to grow about 3 per cent in 2016, higher than the national average.
Across the country, the private sector created 14,400 jobs while the public sector added 8,400 positions. Self-employment declined by 24,900 spots and employers added 22,800 jobs.
Analysts polled by Bloomberg had expected the economy to create 1,000 jobs and the jobless rate to inch up one notch to 7.2 per cent from 7.1 per cent in March.
Canada jobs report
A new star province
British Columbia was the star province in the jobs report, with its jobless rate falling to the lowest in Canada for the first time in records back to 1976. The unemployment rate fell to 5.8 per cent on hiring in retail, health care and construction.
U.S. jobs report
A relative shortfall on job creation
The number of jobs added last month – 160,000 – undershot consensus expectations of 200,000. Moreover, revisions subtracted 19,000 jobs from the reports for March and February, which reduced the monthly average for the year to 192,000.
Not all the news was bad
The April report wasn't entirely disappointing. Notably, wages gained 0.3 per cent, bringing the annual increase to 2.5 per cent. And long-term unemployment fell by 150,000.
It makes life harder for the Fed
These competing forces complicate the U.S. central bank's deliberations about the timing of further interest-rate increases. The conflicting data make the jobs report for May, which will be released next month, an even more important input for the June meeting of the Federal Open Market Committee.
Markets may have overreacted
Rather than wait for policy signals, fixed-income markets immediately followed the report's release by sharply lowering the probability of a rate hike in 2016. This may be an overreaction. It is too early to rule out the likelihood of one or even two increases this year.
Bloomberg News
Rachelle Younglai