CTVNEWS

Canadian unemployment slips to 7.7 per cent in March

CTV.ca News Staff Published Friday, April 8, 2011 9:09PM EDT

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Despite predictions Canada's economy would gain 20,000 jobs in March, it actually lost 1,500, the latest Statistics Canada numbers reveal. But the overall unemployment rate did slip to 7.7 per cent from 7.8 per cent, as predicted, as almost 15,000 fewer people were looking for work.

Though the number of jobs lost is considered statistically irrelevant, the drop in jobs was still a surprise, since it was well off the average of 38,000 jobs that the economy had been creating each month since December.

But economists say things aren't as bad as they seem, since full-time employment rose by 90,600 in March, with most of the job losses felt by those working part-time. The decline of 92,100 part-time jobs doesn't reflect that the numbers of hours worked in the month actually went up, Scotiabank economist Derek Holt told The Canadian Press.

The most significant gains in March came in the accommodation and food services sector, which saw a 36,000 increase in jobs. Employment in these industries is now at roughly the same level as 12 months earlier.

The construction industry also saw the creation of 24,000 new jobs. Over the past 12 months, employment in this industry has increased by 5.3 per cent (+64,000), one of the highest rates of growth among all industries.

But the health-care and social assistance industries saw 17,000 jobs disappear. As well, the number of public sector employees fell in March.

On a provincial basis, the biggest change was in Quebec, where 14,700 jobs were lost during the month, even though the overall employment rate held steady.

In Ontario, 63,000 new full-time jobs were mostly offset by the loss of 58,000 part-time positions.

The month saw men do comparatively well, while older women and youth suffered the most losses. Employment among males 25 and over increased by 32,000, while work among women over 55 fell by 17,000. Youth between 15 and 24 years old also saw job losses.

John Stephenson, vice-president of First Asset Funds, said the report showed positive growth in private-sector jobs and full-time work, but noted most of the growth was in fairly low-paying jobs.

"If you look at the quality of jobs that were created in full-time jobs, a lot were in retail, which was probably a bit of a negative because we lost manufacturing jobs and we lost public sector jobs," he told CTV News Channel on Friday. "There's clearly a shift. There's the high-end knowledge worker jobs and retail, and not much in between."

The mixed results of this jobs report will likely play a role Bank of Canada Governor Mark Carney's interest-rate decision next Tuesday. Most economists expect the bank will leave borrowing costs untouched at 1 per cent, because of economic uncertainty outside Canada.

"I think it's pretty clear that the Bank of Canada… will not be raising rates," said Stephenson, following the release of Friday's update.

The central bank has kept its benchmark rate at 1 per cent since September after raising it three times last year.

The results will also have different repercussions on the campaign trail. Both opposition parties and the government can use the numbers to defend their position, Douglas Porter of BMO Capital Markets told The Canadian Press.

"Where you stand on this report depends on where you sit," he said. "It's definitely a mixed bag."

Here's what happened provincially (previous month in brackets):