British Columbia outpaced the national average for reducing the unemployment rate in June, edging the number of jobless down slightly to 8.3 per cent from 8.6 per cent in May.
The province gained 2,100 new jobs last month, but some 5,500 people dropped out of the labour force and B.C. continued to maintain the worst unemployment rate west of Quebec, according a report released Friday by Statistics Canada.
The Canadian economy generated more than 49,000 jobs last month, but only 5,400 of those were full-time positions. This increase, combined with a much weaker currency, reduces the chances that the Bank of Canada will be cutting interest rates on Tuesday.
The private sector was responsible for about half of the new net jobs in June. This was due entirely to a surge in the number of self-employed Canadians, considering that the number of private-sector employees nationwide fell by 12,300.
Last month, national employment rose in service-producing industries, especially transportation and public administration, but fell by a further 23,000 in manufacturing, continuing a decline that has wiped out 89,000 factory jobs across Canada since late last year.
The unexpected surge in employment -- analysts had expected a decline of up to 10,000 jobs -- nudged the national unemployment rate down a notch to 7.7 per cent from 7.8 in May. B.C. was slightly ahead of the national rate by shrinking its unemployment rate by 0.3.
The news stopped the steep week-long slide in the dollar, quickly lifting it back up above 72.5 cents US, from the low 72-cents level. The loonie had fallen from nearly 75 cents US last week.
"This makes it all the more likely that the Bank of Canada will stay on watch-and-wait mode through the summer, awaiting the upturn in the U.S. economy," said Nesbitt Burns economist Douglas Porter. "However ... should the U.S. economy stumble again, the bank may yet be prompted to trim rates in the fall, especially in view of the deepening slide in domestic manufacturing activity."
Analysts agreed that the report does not change the fact that the labour market has weakened, with the growth in jobs being in part-time work or self-employment.
And individual Canadians are also worried about the employment outlook, according to the Conference Board of Canada, which reported that those concerns were behind a drop in consumer confidence last month.
Only 15.8 per cent of the more than 2,000 people surveyed felt that there will be more jobs six months from now -- nearly five percentage points lower than in May.
While job growth this year has slowed from last year's near record pace, Statistics Canada noted that the 84,000, or 0.5-per-cent increase in employment so far in 2003 is still better than the U.S. where employment has slipped 0.2 per cent.
But there has been little growth in full-time jobs for two months now, following strong gains earlier in the year, it added.
"The stronger than expected employment report marks a tentative improvement in what has been a deteriorating labour market," said Ted Carmichael, economist at J. P. Morgan.
Still, the economy likely shrank in the second quarter of this year, added Carmichael, saying the employment report has merely delayed a rate cut until the fall, when he expects inflation will have fallen below the bank's two-per-cent target.
And offsetting some of the optimism over the job numbers was news from Statistics Canada that exports plunged in May to a 19-month low.
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