Canadian jobless rate dips on part-time hires

The Canadian economy added more jobs than expected in January, boosted by part-time hires, according to government figures released on Friday.

Employment increased by 43,000 in the first month of 2010, pushing the unemployment rate down a notch to 8.3%. It was the fourth employment gain in six months. The additions were higher than economists’ forecasts for 15,000 jobs to be added.

However, stripping out the part-time workers, full-time employment levels were little changed in the month, StatsCan said.

“The mix left something to be desired,” said CIBC World Markets Senior Economist Avery Shenfeld. “The leaning was towards part-time positions in the service industries and we would like to see more evidence of the cyclical goods sector and manufacturers being in a position to hire.”

Canada’s economic recovery is forecast to accelerate from the second half of this year, according to the Bank of Canada, though the employment picture remains patchy. There are still 280,000 fewer jobs than there were before recession began, with the biggest declines seen amongst manufacturers.

Friday’s figures gave a short-lived boost to the loonie, which jumped to C$1.716 to the U.S. Dollar, or 93.32 cents US, from C$1.0749 to the U.S. dollar, or 93.03 cents US just before the report. It soon gave up the gains to stand at $1.068 in morning trading.

“The devil was in the details, as all new jobs were part time, so definitely not a report that should provide the loonie with any support,” Knightsbridge Foreign Exchange said in a note.

The gains in January employment were led by women aged 25 to 54 and youths, marking the first significant decrease in youth unemployment since the financial market meltdown starting in October 2008, StatsCan said.

Employment for youths increased 29,000, pushing the unemployment rate down from 16.0% to 15.1%.

About 32,000 women found jobs taking their unemployment rate to 6.3%, StatsCan said.

"The growth in part-time work is absolutely no cause for celebration," said Canadian Auto Workers union President Ken Lewenza. "Instead it means that more Canadians are ending up in precarious employment - characterized by irregular hours, little job security, low wages and few benefits - this is really nothing to cheer about."

Business, building and other support services, coupled with retail and wholesale trade were the sectors leading the hiring, while professional, scientific, technical services and agriculture all shed workers.

Manufacturing edged down in January. While employment in this industry has been little changed since July 2009, it remains 223,000 below the level observed in October 2008.

In terms of geography, more than half of the gains in employment came in Ontario, followed by British Columbia and Manitoba.