Employers in Ottawa and Gatineau added new workers to their payrolls for the third straight month in November, but couldn’t keep pace with growth in the labour force, Statistics Canada reported Friday.
Even as the region added 3,300 new jobs last month, an additional 5,200 people began looking for work. That pushed the unemployment rate up 30 basis points to 6.7 per cent, its highest level since January 2011.
The construction industry was among the sectors posting strong gains. There were 43,200 people employed in that sector locally last month, up from 36,600 a year earlier, according to Statistics Canada analyst Vincent Ferrao.
Increases were also recorded in retail and wholesale trade (up 7,800 year-over-year to 85,600), finance, insurance, real estate and leasing (up 12,200 to 39,000) as well as the information, culture and recreation sector (up 11,700 to 38,300).
By contrast, the education sector posted a large decline, shedding 9,400 positions year-over-year to fall to 45,500.
The tech sector contracted to 41,500 jobs last month. That’s down from 44,600 a year earlier and 46,200 in October 2010.
Meanwhile, the large local public administration sector was flat last month, which follows a string of declines that started in May.
Overall, in the first 11 months of this year, local employers have added approximately 16,000 new jobs, an increase of 2.3 per cent, according to Mr. Ferrao.
Nationally, Canada's economy showed surprising bounce last month when 59,300 jobs were added, dropping the unemployment rate two-tenths of a point to 7.2 per cent.
The report from Statistics Canada on Friday was among the strongest of the year, not only in terms of job creation, but also in the type of jobs - almost all the gains were in full-time employment and in the private sector. As well, hours worked increased 0.2 per cent in November.
Prior to the early morning release, markets and economists had looked for modest gains of about 10,000 workers, in line with a weak summer that produced the worst quarter in over a year; the anemic 0.6 per cent advance during the July-September period.
"The bottom line is the Canadian economy is not quite as weak as some of the recent indicators had suggested. It's very encouraging," said Doug Porter, deputy chief economist with the Bank of Montreal.
"On a stand-alone basis, this was one of the best job gains we've seen in the year and the unemployment rate has matched its cycle low. Even in the structure of the jobs, they're mostly full-time, they're mostly in the private sector."
The Canada's dollar moved up smartly on the news, gaining a quarter of a cent against the U.S. dollar to about 101.14 cents US shortly after the announcement.
The currency was also helped by a simultaneous U.S. jobs report, which saw a 146,000 employment pick-up in November, and the unemployment rate fall to 7.7 per cent, the lowest in almost four years. The U.S. report was not as positive as it first appeared, however, because the Labor Department revised downward the previous two months by 49,000 jobs.
Still, economists were encouraged that in both countries, the labour market is showing signs of resisting the considerable headwinds from Europe, and confidence-sapping political squabbling in Washington over budget issues.
CIBC World Markets chief economist Avery Shenfeld called the Canadian situation a "splash of good news that has been in short supply in recent months."
Earlier in the week, Bank of Canada governor Mark Carney characterized the third quarter hiccup in Canada as temporary and said he was looking for the economy to pick up steam in 2013. Still, analysts are not looking for a strong final stretch this year.
The jobs performance, however, provides some cover for Carney's decision on Tuesday to retain his mild tightening bias, which basically tells markets the next policy move, when it comes, will likely result in a hike in interest rates.
With November's pick-up, employment gains in Canada have reached 294,000 over the past 12 months, a relatively healthy outcome.
If there were weaknesses in Friday's numbers, it was that the services sector was responsible for all the gains, with the relatively low-paying hotel and restaurant industries leading the way with a 28,000 increase. The more desirable goods producing sector actually saw employment decline by about 6,000.
As well, Statistics Canada said average wages fell to 2.2 per cent annualized in November, from 3.7 per cent in October, a plunge that left analysts scratching their heads to explain.
By industry, employment rose about 28,000 in the accommodation and food services industries, while retail and wholesale trade increased by about 25,000, and professional, scientific and technical services picked up 23,000.
Manufacturing had another bad month, shedding 20,000 workers, and construction dropped 8,400. There were also 15,000 fewer workers in the other services category.
Regionally, Ontario saw the most improvement with a pick-up of 32,000 jobs, dropping the province's unemployment rate 0.4 points to 7.9. Quebec gained about 18,000 jobs and Alberta 10,000. There were small employment reversals in British Columbia, Nova Scotia and Saskatchewan.
-With a report by Julian Beltrame of the Canadian Press