The Labour Force Survey for June posted weakness in the goods-producing sector and a sharp drop in manufacturing hours, underscoring export weakness and suggesting that the Canadian economy remains vulnerable despite the stronger headline jobs figure, Rosenberg Research said Monday.
The goods-producing sector showed employment fell in June in the largest decline since the pandemic period, Rosenberg Research said in a note, adding that declines of this magnitude have tended to occur in official recessions.
"The Canadian economy is not exactly out of the woods even if the consensus economics narrative is of that opinion," said Rosenberg.
The headline gain in the June labor survey masks underlying weakness, according to Rosenberg. Nearly all of the increase came from part-time employment, reversing only part of the steep declines earlier in the year and leaving employment still down 6,300 year-to-date.
The jobs data also highlighted a soccer World Cup-related boost, with gains concentrated among younger workers, the self-employed, and accommodation and food services, Rosenberg added. Excluding these temporary effects, employment would have been roughly flat in June.