The March edition of Statistics Canada's Labour Force Survey brought some good news today. Canada's unemployment rate fell 0.2 percentage points in March and is now at 7.2 percent. The Survey indicates that employment increased by over 80,000, with most of these being full-time positions (approx. 70,000).
From a national standpoint, this is good news, especially considering that the majority of these gains come from the private sector. Also, it's important to note that there was a positive pick-up in new jobs stemming from the manufacturing sector (approx. 12,000). Increased private sector job creation is a welcome trend, especially given the upcoming public sector job cuts in the coming months and years.
Notwithstanding this good news, Canada's labour market is still facing some significant challenges ahead. The rate of government spending is growing at the slowest pace in nearly a decade, and may even turn negative as a result of public sector spending cuts. Also, consumer spending and credit are slowing significantly, suggesting that overall growth is unlikely to come from households in the near term. And, finally, with increased exports unlikely to give a boost to Canada's economy in the near-term, it's not at all obvious that today's good news marks the start of a positive and sustainable new trend for the Canadian labour market.