Larger workforce, job losses drive Ottawa-Gatineau unemployment rate up to 5.5% in April

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The National Capital Region’s unemployment rate jumped four-tenths of a percentage point in April as more residents joined the labour market while the total number of jobs fell, Statistics Canada said Friday.

The unemployment rate in Ottawa-Gatineau last month stood at 5.5 per cent, the agency said in its latest labour force survey. That’s up from 5.1 per cent in March and the highest rate in the region since December 2017.

The size of Ottawa-Gatineau’s labour force ​– which includes people looking for work ​– rose to 790,600, an increase of 2,000 over March. Meanwhile, the total number of employed residents declined from 748,500 to 747,100.

The downturn in the job market came despite big gains from two of the region’s largest employers.

An additional 5,200 public administration workers joined the payrolls in April, while the high-tech sector added about 800 jobs.

But those gains were offset by a steep drop in the educational services sector, which had a net loss of 4,000 positions. Other sectors that shed jobs last month included construction (down 2,300 jobs), health care (down 1,700 positions) and information, culture and recreation, where 1,000 jobs disappeared.

National unemployment falls

Overall, the employment picture was much rosier in the rest of the country in April.

Canada's labour market delivered a surprise with its biggest one-month employment gain since the government started collecting comparable data in 1976.

The country added 106,500 net jobs in April, the bulk of which were full-time, Statistics Canada said.

The rush of new jobs far surpassed market forecasts and helped drop the unemployment rate to 5.7 per cent, down from 5.8 per cent in March.

The labour market has seen strong numbers since mid-2016 and has remained a bright spot for an economy that has struggled in other areas. Economic growth, for instance, almost stalled over the winter.

“Wow. This was by and large a solid report. Nearly every indicator of quality came in strong this month,” TD senior economist Brian DePratto wrote in a research note.

“Chalk this one up as a solid message that employers still have faith in the Canadian economy.”

Overall, compared with March, employment in April was up 0.6 per cent, which was the highest proportional monthly expansion since 1994 when it reached 0.7 per cent.

A closer look at April reveals the overall gain was driven by the creation of 73,000 full-time jobs and 83,800 positions in the private sector.

The gains were spread across many industries, with both the services and factory sectors seeing gains. Employment rose by 32,400 in wholesale and retail trade positions, while the construction sector added 29,200 jobs.

A rush of 66,400 part-time positions for workers aged 15 to 24 years old helped lower the youth unemployment rate last month to 10.3 per cent, down from 10.7 per cent, the survey said.

By region, Ontario, Quebec, Alberta and Prince Edward Island all saw net job gains last month.

Desjardins senior economist Helene Begin said in a report that nearly 80 per cent of the overall gain was concentrated in Ontario, which added 47,100 jobs in April, and in Quebec, which saw its jobless rate fall to 4.9 per cent for its lowest level since the survey's creation in 1976.

Year-over-year average hourly wage growth for all employees in April was 2.5 per cent, up from a reading of 2.4 per cent in March. Wage growth is a key indicator monitored by the Bank of Canada ahead of its interest-rate decisions.

Robert Kavcic, senior economist at BMO Capital Markets, said that overall the strong numbers suggest the economy has been rebuilding momentum in the second quarter following a sharp winter slowdown.

The Bank of Canada has blamed the deceleration on temporary factors and is predicting the economy to pick up its pace as 2019 progresses.

While the monthly jobs figures are often volatile, over the longer term Canada has been on a solid employment run.

Compared with a year earlier, the economy added 426,400 jobs for a proportional increase of 2.3 per cent. The labour market has created an average of 36,000 jobs per month over the past year.

The numbers have remained strong even though more and more people have been looking for work in Canada. The ranks of workers have grown in recent years thanks in large part to a big immigration boost.

“The good news here is that despite the fact we've seen such a huge increase in labour-force growth, the jobless rate has come down,” Kavcic said.

“The labour market in Canada is doing pretty well at absorbing that influx of labour right now.”

The April increase put Canada back on the job-creation path following a one-month interruption in March.

Overall employment dropped by 7,200 net jobs in March, the first monthly decrease after six consecutive months of rising employment between September and February.

Economists had expected a gain of 10,000 jobs for the month and the unemployment rate to remain at 5.8 per cent, according to Thomson Reuters Eikon.

– With files from the Canadian Press