April’s Shower of Jobs

This morning, Statistics Canada reported that employment shot up by an incredible 108,700 in April. Although employment has been recovering for almost a year, it had lagged behind the rebound in output. But today’s job numbers show a 0.6% rise in monthly employment, double the monthly GDP growth reported last week.

Total hours worked increased by 1.1% in April, confirming that employers are having existing employees work more as well as hiring more employees. However, this mammoth increase in hours bodes poorly for second-quarter productivity figures (output divided by hours).

The New Jobs: A Closer Look

Essentially all (98%) of the new jobs are positions actually paid by an employer as opposed to self-reported self-employment. However, most of these positions are part-time, rather than full-time.

In the goods-producing sector, employment losses in manufacturing mostly offset employment gains in construction. Therefore, essentially all (98%) of the net employment increase occurred in the service sector:
– 31,600 in retail and wholesale trade
– 31,300 in “business, building and other support services” (this category includes some lucrative management positions, but mostly consists of secretarial, security, and other support jobs)
– 19,500 in “information, culture and recreation” and 29,000 in “other services”

In 2009, Canada’s average hourly wage was $20.44. The new jobs are overwhelmingly in service industries that pay lower wages: retail trade ($14.35), wholesale trade ($19.41), administrative and support services ($16.79), arts, entertainment and recreation ($14.85) and “other services” ($18.28).

Unemployment Persists

April’s shower of new jobs barely dented unemployment. With some 92,000 Canadians entering (or returning to) the labour force, the 108,700 additional jobs only reduced national unemployment by 16,800.

Indeed, unemployment actually increased in several provinces: Nova Scotia, Quebec, Ontario, and Saskatchewan. Nationwide, 1.5 million Canadians remain officially unemployed.

The unemployment rate is a ratio of unemployment to the total labour force. This rate edged down nationally (and even provincially in Quebec) because the total labour force expanded, rather than due to reduced unemployment.

UPDATE (May 8): Quoted in The Toronto Star and Hamilton Spectator