July 25, 2013 / 4:55 PM / 5 years ago

Canada jobs data diverge but point to slower hiring

OTTAWA (Reuters) - There’s a huge discrepancy in two sets of government figures on growth in Canada’s labor market in May, but both point to a slower pace of hiring that could signal bumps on the economic road ahead.

Statistics Canada said on Thursday that nonfarm payrolls were up 8,500 in May. That is less than one tenth the number of jobs that the agency’s Labour Market Survey, released in early June, said were created in the same month.

Statscan analyst Emmanuelle Bourbeau said there are many differences in the way the two reports measure the jobs market, but there is at least one similarity in the results: “Employment growth is slowing down in both surveys,” she said.

The Labour Force Survey, Canada’s most timely employment report, showed a gain of 95,000 jobs in May, a huge figure that shocked markets. The increase would be roughly equivalent to the creation of 850,000 jobs in the far bigger U.S. market.

But the June survey, released on July 5, showed Canada shed 400 jobs.

Canada’s economy has long recovered from the 2008-09 recession but the unemployment rate remains about a percentage point higher than it was before the crisis.

Bourbeau noted that the Labour Force Survey reflects the moment that people are hired, while the payrolls number focuses on when they actually get on a payroll, often a few weeks later.

The frequently revised payrolls census also excludes the self-employed, religious organizations and private household services, while the labor force survey excludes residents of native reserves and institutions, and much of northern Canada.

BMO Capital Markets senior economist Sal Guatieri noted that a big gap can open up between the two surveys. The survey released on Thursday is likely more reliable, but because it comes out six weeks later, people pay much less attention to it.

“We always thought the establishment survey is a better guide to job growth because it measures who’s actually being paid,” he said. “Bottom line is job growth has slowed, but it will probably pick up very slightly going forward.”

Year on year in May, the payrolls survey showed employment grew 0.8 percent, while the Labour Force Survey showed a 1.4 percent gain. This is down from December readings of 1.6 percent and 1.8 percent respectively.

Excluding the self-employed from the Labour Force Survey yields these results, which also point to slower jobs growth:

Reporting by Randall Palmer; Editing by Janet Guttsman, Chizu Nomiyama and Peter Galloway

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