Today’s employment numbers from Statistics Canada, which show a rise of 7,300 jobs in June, are a welcome sign, according to BMO Economics. The Canadian numbers were released simultaneously with Nonfarm Payrolls data from the U.S., which showed a moderate increase for the third straight month.
“Most aspects of the report were on the solid side, as all of the gains were in full-time jobs,” said Doug Porter, Deputy Chief Economist, BMO Capital Markets. “The unemployment rate in Canada dipped a tick to 7.2 per cent, matching the cycle low which has been reached twice before.”
Mr. Porter noted that, while these numbers are not terribly strong, the moderate job gains in Canada are nevertheless welcome after the increase of nearly 150,000 net new jobs in the three prior months. “The strength in jobs in prior months happened despite signs that the broader Canadian economy was sluggish. So, the more moderate growth in June is likely to be the norm through the second half of the year. From a consumer spending standpoint, the rise in wages and the increase in work hours point to a decent gain in spending power.”
The moderate gains reflect the results of the BMO Hiring Intentions Survey, which shows 46 per cent of Canadian businesses plan to hire new employees this year, while slightly more (51 per cent) do not have plans to add additional staff this calendar year.
“While Canadian companies continue to remain cautiously optimistic in their outlook, we are seeing a willingness to make deliberate and targeted investments to grow their business, including for some the addition of new employees to their workforce,” said Cathy Pin, Vice-President, Commercial Banking, BMO Bank of Montreal. “With a degree of uncertainty about the global economy still a consideration, many businesses are making these investment choices differently based on the sector they operate in, possibly their physical location, and on their own business plans. Sometimes these will include new hiring and sometimes it will center on other types of growth initiatives.”
About BMO Financial Group
Established in 1817 as Bank of Montreal, BMO Financial Group is a highly-diversified North American financial services organization. With total assets of $525 billion as at April 30, 2012, and more than 46,000 employees, BMO Financial Group provides a broad range of retail banking, wealth management and investment banking products and solutions.