Canada's job picture surprisingly, um, un-weak

Most economists thought the job numbers released this morning by Statistics Canada would be terrible, that they would show that the Canadian economy shed another 35,000 to 40,000 jobs last month.

In, fact, Statistics Canada found that just 7,400 people lost their jobs last month, the statistical equivalent of zero per cent change from May to June. The unemployment rate did rise from 8.4 per cent to 8.6 per cent but that's because more than 30,000 people entered the workforce. So while the number of jobs remained relatively stable, there was an increase in the number of people looking for jobs and that bumped the unemployment rate.

Here's a snippet of reaction from Bay Street to the numbers:

Doug Porter at BMO Capital Markets says: “Today’s job report, while hardly a walk in the park, compares favourably to the dire U.S. news from the same month. Still, even if the job losses are gradually easing, it’s obvious that recession has yet to let go its steely grip on the Canadian economy, with the squeeze remaining particularly intense in manufacturing. On balance, while this report is not as friendly as the headline would suggest, it’s also not shockingly weak—a relief.

Dawn Desjardins at RBC Economics Research: “The labour numbers are consistent with the economy continuing to contract in the second quarter, although the slowing pace of decline suggests that conditions are becoming less dire. We look for the unemployment rate to continue to drift higher, rising by 0.1% to 0.2% each month rather than the large 0.3% to 0.6% jumps recorded earlier in the year. We also expect the rate to peak at 9.2%, portending an easing in price pressures as the amount of economic slack grows. Against the backdrop of a rising unemployment rate, growing economic slack and lessening price pressures, the case for the Bank of Canada to keep to its conditional commitment of maintaining a 0.25% policy rate looks solid.”

Aron Gampel at Scotiabank, speaking on BNN this morning: ” It surprised everyone.. the trend shows the pace of job cutting has clearly slowed and that's the transition phase from recession to recovery. You know what? You could have a much bigger rate of growth and some renewed job creation by later this year in some key sectors. It may not prevent the unemployment rate from continuing to move higher, but employment is typically, at best, a coincident but probably a lagging indicator.”

I'll update with more as I see them to day …