The Canadian economy added a record 106,500 jobs in April, Statistics Canada said on Friday, a timely boost for Prime Minister Justin Trudeau, who trails in opinion polls less than half a year before the October general election.
The unexpected increase helped lower the jobless rate to 5.7 percent in April from 5.8 percent in March. The reason for the decline isn't a good one, London lost 3,100 jobs last month, that coincides with a drop in the overall labour force and the number of people claiming unemployment. The soft spot in the labour market data remains wages, but year-over-year growth in average hourly earnings did tick up for a third straight month, rising to 2.5% in April from 2.4% in March.
Meanwhile, economists have warned that Canada is facing the risk of a recession despite the positive labour market dynamics.
In currency markets, the Canadian dollar, known as the loonie, rose 0.7 percent against a basket of its major peers, while yields on two-year Canadian government bonds rose 0.04 percent to 1.62 percent. "These wage numbers won't do it", said Nathan Janzen, a senior economist at the Royal Bank of Canada. While full-time employment rose by 5,700 positions from March to April, part-time roles saw a decline of 4,200.More news: Democrats thinking about each day contempt fines on Trump officials: Schiff
In Campbellton and Miramichi, the unemployment rate was at 15.4 per cent, up from 14.4 per cent.
Employment gains were spread across industries including wholesale and retail trade; construction; information, culture and recreation; agriculture; and public administration.
Employment in Ontario jumped by 47,000 in April, with job increases in Canada's largest province at 205,000 over the past year.
In Saskatchewan, employment was little changed month to month.More news: After Trump Invite, Iran Commander Says
In the Saint John and St. Stephen region, the rate was at 6.8 per cent, down from 7.1 per cent.
"We are putting Ontario back on track", he said.
Late last month, the Bank of Canada held interest rates steady and removed wording around the need for future hikes, while lowering its growth forecast for 2019, to cement the market's view that further increases are off the table for now.
Analysts had warned as recently as last month that Canada ran the risk of falling into a recession amid a ideal storm of negative factors - falling oil prices, volatile financial markets, higher interest rates, cooling housing markets and global trade tensions.More news: Tiger Woods: Sir Nick Faldo reveals PGA Championship problems for Woods