OTTAWA (Reuters) - Canadian jobs growth disappointed in April as the economy created fewer jobs than expected, while the unemployment rate fell to its lowest since the global financial crisis amid a drop in the number of young people looking for work.
Economists said the labor market had been due for a pause after a strong run in recent months, and that the report would not change the path of monetary policy. The Bank of Canada is expected to hold interest rates at 0.50 percent later this month.
Employers added 3,200 jobs last month, Statistics Canada said on Friday, short of forecasts for 10,000. The unemployment rate fell to 6.5 percent, the lowest since October 2008, as the participation rate dipped to 65.6 percent from 65.9 percent.
While it was the weakest month for jobs since a decline in hiring in November, the labor market has averaged hiring gains of 22,000 a month over the past six months. That suggests the economy has turned the corner after being hurt two years ago by tumbling oil prices.
“The trend has been explosive for the Canadian job market,” said Derek Holt, economist at Scotiabank. “I personally wouldn’t throw in the towel on the outlook for the jobs figure when we’ve had such a strong trend.”
The Canadian dollar weakened against the greenback shortly after the report, as investors also digested data showing a strong rebound in jobs growth in the United States.
Full-time jobs declined by 31,200 in April, offsetting an increase of 34,300 part-time positions, though some economists had expected full-time hiring would pull back after recent strength. Over the last six months, 164,000 full-time positions were created, compared with a decline of 34,000 part-time jobs.
Goods-producing industries added 4,200 jobs, led by increased hiring in the agriculture and natural resources sectors. The services sector shed 1,000 jobs.
Economists noted there were some weak details, including an increase in average hourly wages of just 0.5 percent compared with a year earlier. The Bank of Canada has pointed to the subdued wage growth as evidence of material slack in the economy.
The muted wage growth was likely to keep the central bank on the sidelines in terms of monetary policy changes, said Paul Ferley, assistant chief economist at RBC.
“It’s not getting any indication of pressure on the inflation front and they are still concerned about potential trade protectionism emerging in the U.S., so I think they will stay cautious,” Ferley said.
Additional reporting by Alastair Sharp and Fergal Smith in Toronto; Editing by Bernadette Baum