CAD: Manufacturing sector weighing on employment – Deutsche Bank

Brett Ryan, Research Analyst at Deutsche Bank, notes that the recent Canadian employment report was modestly weaker than consensus expectations as hiring declined -2.1k in April compared to a 40.6k gain in the prior month.

Key Quotes

“The unemployment rate remained at 7.1% but the participation rate fell a tenth to 65.8%. Within the details of the labor force survey, manufacturing hiring fell for the second consecutive month (-16.5k vs. -31.8k). Business services was another source of weakness in April (-16.0k vs. +1.9k). However, overall service-sector employment increased 35k, which followed a 74.7k gain in the prior month.

On a seasonally-adjusted basis, average usual hours were steady at 36.6 and the average hourly wage rate increased a couple of tenths. Compared to a year ago, the average hourly wage rate is up 2.9%, a slight deceleration from the 3.2% annual growth rate in March and the post-recession high of 3.7% (July 2012). Compared to a year ago, overall employment growth was up 0.8% in April, which is roughly in line with the annual growth rate over the past 12 months.”