Canada April employment data: WOW!

When Statistics Canada reported that the Canadian economy shed about 7,000 jobs in March, it was easy to assume that the employment market was finally starting to reflect the slowdown in GDP growth that became evident late in 2018.  As one perspicacious prognosticator (well, me) put it, "it would not be a surprise if gains in employment in the next few months are limited at best."

Can I take a mulligan there please?  This morning StatsCan reported that employment in April grew by 107,000, the largest-ever monthly increase in the series, which dates back to 1976.  There were gains in full-time jobs, up 73,000 in the month, and a big increase in part-time youth employment.  Most of the new jobs -- 84,000 -- were in the private sector.  The unemployment rate ticked down to 5.7 percent.

Looked at on a year-on-year basis, the numbers are if anything even more striking.  The economy has added 426,000 jobs, a 2.3 percent gain, over the past twelve months.  Fully 248,000 of those jobs are full-time, and the total number of hours worked has risen by 1.3 percent from a year ago. Possibly significant from the Bank of Canada's perspective is that wages are starting to move higher again.  After somewhat surprisingly drifting lower in the second half of 2018, the year-on-year wage gain has moved up to 2.5 percent. 

It's frankly difficult to square these numbers with the widespread perceptions that the economy is going through a sticky patch.  Bay Street analysts, never able to resist the temptation to read too much into a single data point, are talking about an economy with "a spring in its step", and "a solid message that employers still have faith in the Canadian economy".  The continuing strength in the US economy and jobs market certainly holds out hope that such may be the case, unless everything gets derailed by Trump's trade temper tantrums. Then again, given the wild volatility that Canadian jobs numbers have shown so many times in the past, it wouldn't be wise to see today's numbers as the start of a new trend.