CA: Labour Force Survey

Fri Apr 06 07:30:00 CDT 2018

Consensus Actual Previous
Employment 20,00 32,300 15,400
Unemployment 5.8% 5.8% 5.8%

March employment was up a greater than anticipated 32,300 that was driven by full-time gains. Full time employment was up 68,300 while part time employment declined 35,900. The unemployment rate was unchanged at 5.8 percent while the participation rate remained at 65.5 percent. First quarter employment was down 40,000 thanks to the decline in January. Over the longer term, employment has been on an upward trend since the second half of 2016. Total employment increased 296,000 when compared with the same month a year ago. Over the same period, total hours worked grew by 2.2 percent.

Employment was up in Quebec and Saskatchewan, while there was little change in the other provinces. There were more people working in construction, public administration and agriculture. The number of public sector employees edged up, while the number of private sector employees and self-employed held steady. Self-employment was little changed in March. Compared with 12 months earlier, the number of self-employed workers increased 97,000.

Employment in construction increased 18,000 in March. Compared with 12 months earlier, employment in this industry grew by 54,000, mostly driven by gains in the second half of 2017.
When compared with a year ago, the fastest pace of employment growth was in transportation and warehousing.

The Labour Force Survey is a key economic indicator giving an overall picture of employment and unemployment. Employment counts the number of paid employees working part-time or full-time in the nation's business and government establishments. The unemployment rate measures the number of unemployed as a percentage of the labor force.

As in the U.S., this report is used as an indicator of the health of the domestic economy. Employment trends and break-downs by industry groups highlight the strength in job creation and the implications for future sectoral activity. The unemployment rate is used as an indicator of tightness in labor markets and can foreshadow a future increase in wages. Labor force data provide investors with the earliest signs of industry performance. While other data are produced with a month or two delay, these data are available only a week to 10 days after the end of the latest month. Reactions can be dramatic - especially when the result is unanticipated.

The information in the report is invaluable for investors. By looking at employment trends in the various sectors, investors can take more strategic control of their portfolio. If employment in certain industries is growing, there could be investment opportunities in the firms within that industry.

The bond market will rally (fall) when the employment situation shows weakness (strength). The equity market often rallies with the bond market on weak data because low interest rates are good for stocks. But sometimes the two markets move in opposite directions. After all, a healthy labor market should be favorable for the stock market because it supports economic growth and corporate profits. At the same time, bond traders are more concerned about the potential for inflationary pressures.

The unemployment rate rises during cyclical downturns and falls during periods of rapid economic growth. A rising unemployment rate is associated with a weak or contracting economy and declining interest rates. Conversely, a decreasing unemployment rate is associated with an expanding economy and potentially rising interest rates. The fear is that wages will accelerate if the unemployment rate becomes too low and workers are hard to find.