By Julie Gordon
OTTAWA (Reuters) - Canada added more jobs than expected in June, bringing employment within 1.8% of pre-pandemic levels, data showed on Friday, with economists eyeing a potential return to higher employment levels by year-end.
The country added 230,700 jobs in June, beating analyst expectations of 195,000, as public health restrictions were eased in several regions, Statistics Canada said. The unemployment rate was 7.8%, just short of expectations of 7.7%.
"The details of the increase were less impressive than the headline, with all of the gain coming from part-time work," said Nathan Janzen, senior economist at RBC Economics, in a note.
"But with virus containment measures continuing to ease, more sizeable labor market improvements are expected in months to come," he added.
The release of the June data was delayed Friday morning by an technical issue with Statscan's website.
Part-time employment rose by 263,900, led by strong gains in youth employment, mostly among young women, while full-time employment fell by 33,200. The service sector added 278,600 jobs, mostly in high-contact services like accommodation and food, while goods sector employment fell by 48,000.
Ontario, Canada's most populous province, loosened some restrictions in early June, allowing limited in-person shopping and dining, but many other businesses remain shuttered. As the reopening expands, employment is expected to balloon.
"I think it's very feasible that we regain, if not all, then most of the jobs lost during the pandemic by the end of this year," said Derek Holt, vice president of Capital Market Economics at Scotiabank.
The strong June gain also supports an expectation that the Bank of Canada will again taper its asset purchase program, potentially as soon as next week. The central bank will update its forecasts as part of its regular rate decision on July 14.
"A very strong report reinforces the idea that the Bank of Canada should be announcing another round of tapering next week," said Jimmy Jean, chief economist at Desjardins Group.
The Canadian dollar was trading 0.3% higher at 1.2471 to the greenback, or 80.19 U.S. cents, after the data.
(Reporting by Julie Gordon in Ottawa, additional reporting by Fergal Smith and Jeff Lewis in Toronto; Editing by Kirsten Donovan, Gareth Jones and Chizu Nomiyama)