Although Canada’s economy has delivered a number of stronger-than-expected data during the first quarter, and both the OECD and Export Development Canada see stronger growth ahead, that doesn’t mean the country’s near-term performance won’t continue to be jagged.

Perhaps the best illustration of the noise economic data can generate in the short term is Canada’s latest Labor Force Survey. According to Statistics Canada (StatCan), employment decreased by 28,900 in April. While economists had been expecting employment growth to moderate in April following March’s gain of 42,900 jobs, they had still forecast that the economy would add 12,000 jobs last month.

In fact, the past six months’ worth of employment data have been marked by sizable gains followed by equally sizable retrenchments. These results underscore the fact that Canada’s monthly jobs report is notoriously volatile, in part due to its sample size of roughly 54,000 households for a country of more than 35 million, so economists typically give greater credence to employment data collected over longer-term periods.

But even when viewed from a slightly longer-term perspective, the country’s economy definitely still has work to do on the employment front, as the overall trend is still downward. Over the trailing three-year period, for example, employment grew by an average of 15,100 jobs per month, while over the trailing year, the economy expanded by an average of 12,400 jobs per month. And over the trailing six months, job creation slowed to an average of 2,900 jobs per month.

For April, the unemployment rate was unchanged, at 6.9 percent, which is still the low for this cycle. However, the reason for that number is not especially cheery, since it came as the result of a decline in labor force participation.

Indeed, the participation rate declined by a tenth of a percentage point, to 66.1 percent, from the prior month, and was two-tenths of a percentage point below the consensus forecast. That’s its lowest level since late 2001.

Full-time employment dropped by 30,900 positions, while part-time employment increased by 2,000 jobs.

Over the trailing three-year period, full-time employment grew an average of 12,600 jobs per month, while over the trailing year, growth in this category has decelerated to just 5,800 jobs per month.

Meanwhile, growth in part-time employment has averaged 2,500 jobs per month over the trailing three years and 4,300 jobs per month over the trailing year. Part-time jobs are considered to be of lesser quality due to lower pay and higher turnover.

Overall, there has been little employment growth in Canada since last August. On a year-over-year basis, the number of people working rose by 0.8 percent, or 149,000, evenly split between part-time and full-time work.

Under normal circumstances, the number of hours worked is an important indicator of future labor demand. However, StatCan’s survey took place during the week of Good Friday, and because many workers took vacations during that period, the number of hours worked fell by 1.1 percent. So for April at least, this number can probably be disregarded.

From an investment standpoint, it might be helpful to know which industries are actually experiencing job growth. On that basis, utilities, natural resources, transportation and warehousing, and business, building and other support services are the four sectors showing meaningful year-over-year job growth of 15.5 percent, 6.4 percent, 5.5 percent, and 5.5 percent, respectively.

Though the Canadian dollar sold off in the wake of the country’s employment report, the loonie still trades near a four-month high, at USD0.9174. That’s also about 3.1 percent above the late-March low of USD0.8894, but still down about 13.5 percent from this cycle’s high of USD1.06 set back in mid-2011.

Canada’s Economy Sustains Its Lead

While Canada’s economy is very much dependent on its neighbor to the south, in part because the US absorbs about three-quarters of its exports, that doesn’t mean there aren’t periods when its economic growth outpaces the US. We don’t yet know how much Canada’s economy grew during the first quarter, but the data so far suggest it may have sustained its second consecutive quarter of outperformance.

In the fourth quarter, Canada’s gross domestic product (GDP) grew at a seasonally adjusted rate of 2.9 percent quarter over quarter versus 2.6 percent for the US. The US has already reported that its economy grew by just 0.1 percent for the first quarter, a weak performance that was largely a result of an unusually harsh winter.

Thus far, StatCan has reported that Canada’s economy shook off the extreme winter cold, expanding by 0.5 percent month over month in January and by 0.2 percent in February.

The data release for February, which came out toward the end of April, showed that the output of goods-producing industries rose 0.5 percent that month, while service industries ticked up by 0.1 percent.

The natural resources sector played the largest role in February’s performance. Mining and quarrying (excluding oil and gas extraction) rose 4.8 percent, primarily as a result of increased copper and nickel mining. Oil and gas extraction grew 0.7 percent, mainly as a result of higher natural gas production. And support activities for mining and oil and gas extraction were up 0.2 percent.

The beleaguered manufacturing sector was the other key contributor. Manufacturing output rose 0.6 percent, following January’s rise of 1.6 percent. Durable-goods manufacturing grew 0.7 percent, led by transportation equipment. There were also gains in primary metals and non-metallic mineral products.

Non-durable goods manufacturing rose 0.4 percent, with increases in chemical, petroleum and coal products, and paper manufacturing.

Private-sector economists have projected that Canada’s GDP grew by 1.8 percent during the first quarter. Although that blows away the essentially flat performance of the US, Canada’s economy is expected to lose its lead to its larger neighbor during the second quarter, when the country’s GDP is forecast to lag the US by a full percentage point–2.3 percent versus 3.3 percent.

This handoff could occur partly as the result of the lagged effect of slower first-quarter US growth hitting Canada’s second quarter. Regardless, the reacceleration of the US economy is obviously good news for Canada.

For full-year 2014, the US economy is projected to grow 2.5 percent, slightly ahead of Canada’s GDP growth of 2.3 percent.

In the near term, however, we’re certainly ready for the “two steps forward, one step back” approach that’s characterized the economy’s progress to shift into a clearly sustained uptrend.

Bay Street Beat

Since the last issue, a majority of our companies have reported calendar first-quarter earnings.

AltaGas Ltd’s (TSX: ALA, OTC: ATGFF) first-quarter earnings per share beat analyst estimates by 5.5 percent, though it fell short on revenue by 6.4 percent.

Nevertheless, the current mix of analyst sentiment remains unchanged: bullish with a slight neutral tilt, at five “buys,” three “holds,” and one “sell.”

The consensus 12-month target price is CAD50.63, which suggests potential appreciation of 4.8 percent above the current share price.

Artis REIT’s (TSX: AX-U, OTC: ARESF) first-quarter funds from operations (FFO) per unit, the relevant measure of a real estate investment trust’s (REIT) profits, narrowly missed the consensus forecast by 0.3 percent.

The current mix of analyst sentiment remains largely bullish, at seven “buys” and three “holds.” Dundee Securities Corp initiated coverage with a “buy” rating and a 12-month target price of CAD17.25.

The consensus 12-month target price is CAD17.06, which suggests potential appreciation of 5 percent above the current unit price.

Bank of Nova Scotia’s (TSX: BNS, NYSE: BNS) first-quarter earnings per share beat analyst estimates by 0.3 percent, while revenue exceeded top-line forecasts by 3.1 percent.

The current mix of analyst sentiment is split almost evenly between bullish and neutral, at nine “buys,” 10 “holds,” and one “sell.”

The consensus 12-month target price is CAD69.26, which suggests potential appreciation of 3.7 percent above the current share price.

Brookfield Renewable Energy Partners LP’s (TSX: BEP-U, NYSE: BEP) first-quarter results beat the consensus forecast for revenue by 7.8 percent.

The mix of analyst sentiment slightly weakened to neutral with a bullish tilt, at four “buys,” six “holds,” and two “sells.”

Veritas Investment Research Co downgraded the security to “sell” from “buy,” but maintained its 12-month target price at CAD32.00.

The consensus 12-month target price now stands at CAD34.14, which suggests potential appreciation of 6.5 percent above the current unit price.

Cineplex Inc’s (TSX: CGX, OTC: CPXGF) first-quarter earnings per share missed analyst estimates by 49.4 percent, while revenue fell short by just 0.6 percent.

Nevertheless, the mix of analyst sentiment improved from a neutral tilt to a more bullish tilt, at seven “buys,” four “holds,” and two “sells.”

RBC Capital Markets upgraded the stock to “outperform,” which is equivalent to a “buy,” from “sector perform,” or “hold.” It also bumped its 12-month target price to CAD45.00 from CAD44.00.

And Industrial Alliance Securities upped its rating to “buy” from “hold,” while boosting its 12-month target price to CAD43.00 from CAD42.00.

The consensus 12-month target price is CAD42.54, which suggests potential appreciation of 3.6 percent above the current share price.

DH Corp (TSX: DH, OTC: DHIFF), formerly known as Davis + Henderson Corp, fell short of the consensus forecast for first-quarter earnings per share by 0.8 percent, though revenue exceeded top-line forecasts by 5.4 percent.

The current mix of analyst sentiment is neutral with a bullish tilt, at three “buys,” five “holds,” and one “sell.”

Raymond James downgraded the stock to “market perform,” which is equivalent to a “hold,” from “outperform,” or “buy.”

And Industrial Alliance Securities upped its rating to “buy” from “hold,” while boosting its 12-month target price to CAD33.00 from CAD30.00.

The consensus 12-month target price is CAD33.29, which suggests potential appreciation of 4.9 percent above the current share price.

Dundee REIT’s (TSX: D-U, OTC: DRETF) first-quarter funds from operations (FFO) per unit, the relevant measure of a real estate investment trust’s (REIT) profits, narrowly missed the consensus forecast by 0.3 percent.

The current mix of analyst sentiment is evenly split between bullish and neutral, at four “buys” and four “holds.” Desjardins Securities initiated coverage with a “hold” rating and a 12-month target price of CAD30.00.

The consensus 12-month target price is CAD32.71, which suggests potential appreciation of 11.9 percent above the current unit price.

Keyera Corp’s (TSX: KEY, OTC: KEYUF) first-quarter earnings per share beat analyst estimates by 8.2 percent.

The current mix of analyst sentiment is neutral with a bullish tilt, at five “buys” and seven “holds.”

The consensus 12-month target price is CAD77.10, which suggests potential appreciation of 2.3 percent above the current share price.

Shaw Communications Inc’s (TSX: SJR/B, NYSE: SJR) fiscal second-quarter (ended Feb. 28) earnings per share fell short of analyst estimates by 8.6 percent and barely missed on revenue by 0.1 percent.

The current mix of analyst sentiment is largely neutral, at three “buys,” 11 “holds,” and five “sells.”

Euro Pacific Canada Inc downgraded the stock to “sell” from “hold,” but maintained its 12-month target price at CAD25.00.

The consensus 12-month target price is CAD26.17, which is 3.2 percent below the current share price.

Student Transportation Inc’s (TSX: STB, NSDQ: STB) fiscal third-quarter (ended March 31) revenue exceeded forecasts by 6.1 percent, the fourth consecutive quarter in which the firm beat estimates for its top line.

The current mix of analyst sentiment stands at two “buys,” three “holds,” and one “sell.”

The consensus 12-month target price is CAD7.47, which suggests potential appreciation of 10.2 percent above the current share price.

TransForce Inc’s (TSX: TFI, OTC: TFIFF) first-quarter earnings per share fell short of analyst estimates by 2.4 percent and also missed on revenue by 2.7 percent.

The current mix of analyst sentiment is split evenly between bullish and neutral, at six “buys” and six “holds.”

The consensus 12-month target price is CAD25.65, which suggests potential appreciation of 8.8 percent above the current share price.

ARC Resources Ltd’s (TSX: ARX, OTC: AETUF) first-quarter earnings per share beat analyst estimates by 4.5 percent, but disappointed on revenue by 2.3 percent.

The current mix of analyst sentiment is split almost evenly between bullish and neutral, at 10 “buys,” 10 “holds,” and one “sell.”

TD Securities downgraded the stock to “hold” from “buy,” but maintained its 12-month target price at CAD36.00.

The consensus 12-month target price is CAD33.82, which suggests potential appreciation of 9.5 percent above the current share price.

Crescent Point Energy Corp’s (TSX: CPG, OTC: CSCTF) first-quarter earnings per share fell short of analyst forecasts by 74.6 percent.

Nevertheless, the current mix of analyst sentiment remains solidly bullish, at 21 “buys,” one “hold,” and one “sell.”

The consensus 12-month target price is CAD50.27, which suggests potential appreciation of 16 percent above the current share price.

Enerplus Corp’s (TSX: ERF, NYSE: ERF) first-quarter earnings per share missed analyst estimates by 27.8 percent and also disappointed on revenue by 23.1 percent.

The current mix of analyst sentiment remains largely bullish, at 14 “buys” and five “holds.”

The consensus 12-month target price is CAD25.24, which suggests potential appreciation of 9.9 percent above the current share price.

Extendicare Inc’s (TSX: EXE, OTC: EXETF) first-quarter revenue fell short of analyst estimates by 0.7 percent.

The current mix of analyst sentiment remains neutral with a bearish tilt, at three “holds” and two “sells.”

The consensus 12-month target price is CAD7.44, which suggests potential appreciation of 11.2 percent above the current share price.

Lightstream Resources Ltd’s (TSX: LTS, OTC: LSTMF) first-quarter earnings per share missed analyst forecasts by 31.4 percent and also fell short on revenue by 6.5 percent.

The current mix of analyst sentiment remains largely neutral, at two “buys,” 14 “holds,” and two “sells.”

TD Securities boosted its rating to “buy” from “hold” and also increased its 12-month target price to CAD9.00 from CAD7.50.

The consensus 12-month target price is CAD6.99, which is 1 percent above the current share price.

Magna International Inc’s (TSX: MG, NYSE: MGA) first-quarter earnings per share missed analyst forecasts by 6.1 percent, but exceeded revenue estimates by 6.5 percent.

The current mix of analyst sentiment remains largely bullish with a neutral tilt, at 12 “buys,” nine “holds,” and one “sell.”

UBS initiated coverage with a “neutral” rating, which is equivalent to “hold,” and a 12-month target price of CAD111.34.

The consensus 12-month target price is CAD120.16, which suggests potential appreciation of 13 percent above the current share price.

Newalta Corp’s (TSX: NAL, OTC: NWLTF) first-quarter earnings per share missed analyst forecasts by 44.1 percent, but exceeded revenue estimates by 0.9 percent.

The current mix of analyst sentiment remains bullish with a neutral tilt, at five “buys,” four “holds,” and one “sell.”

The consensus 12-month target price is CAD22.11, which suggests potential appreciation of 14 percent above the current share price.

Parkland Fuel Corp’s (TSX: PKI, OTC: PKIUF) first-quarter earnings per share fell short of analyst forecasts by 3.1 percent, but beat revenue estimates by 31.5 percent.

The current mix of analyst sentiment remains bullish with a neutral tilt, at five “buys” and four “holds.”

EVA Dimensions lowered its rating to “overweight” from “buy,” though both ratings are considered equivalent from a sentiment standpoint.

The consensus 12-month target price is CAD21.78, which suggests potential appreciation of 5.7 percent above the current share price.

ShawCor Ltd’s (TSX: SCL, OTC: SAWLF) first-quarter earnings per share beat analyst forecasts by 45.5 percent and also exceeded revenue estimates by 7.3 percent.

The current mix of analyst sentiment remains bullish with a neutral tilt, at four “buys” and two “holds.”

EVA Dimensions lowered its rating to “overweight” from “buy,” though both ratings are considered equivalent from a sentiment standpoint.

And BMO Capital Markets raised its rating to “outperform,” which is equivalent to “buy,” from “market perform,” or “hold.” It also increased its 12-month target price to CAD54.00 from CAD48.00.

The consensus 12-month target price is CAD60.60, which suggests potential appreciation of 12 percent above the current share price.

Vermilion Energy Inc’s (TSX: VET, OTC: VEMTF) first-quarter earnings per share beat analyst forecasts by 9.8 percent and also exceeded revenue estimates by 5.6 percent.

The current mix of analyst sentiment remains bullish with a neutral tilt, at 13 “buys,” seven “holds,” and one “sell.”

The consensus 12-month target price is CAD77.22, which suggests potential appreciation of 10.2 percent above the current share price.

Wajax Corp’s (TSX: WJX, OTC: WJXFF) first-quarter earnings per share missed analyst forecasts by 25.1 percent and also fell short on revenue by 1.7 percent.

The current mix of analyst sentiment remains neutral with a bullish tilt, at four “buys” and six “holds.”

PI Financial Corp lowered its rating to “neutral,” which is equivalent to “hold,” from “buy,” and also dropped its 12-month target price to CAD32.50 from CAD40.00.

And Cantor Fitzgerald raised its rating to “buy” from “hold,” though it lowered its 12-month target price to CAD36.00 from CAD38.00.

The consensus 12-month target price is CAD36.64, which suggests potential appreciation of 11.2 percent above the current share price.

In the listing below, the number of analyst “buy,” “hold” and “sell” ratings for each company are shown, followed by the average 12-month target price among the analysts for which we have access to such data.

Month-over-month variances in the number of analysts listed below for each stock are often due to those securities being on a brokerage’s restricted list for a brief period. A restricted list is a compliance measure that’s typically used during the period when the investment banking side of an analyst’s firm is involved in advising the company.

Conservative Holdings

• AltaGas Ltd (TSX: ALA, OTC: ATGFF)–5–3–1 (CAD50.63)
• Artis REIT (TSX: AX-U, OTC: ARESF)–7–3–0 (CAD17.06)
• Bank of Nova Scotia (TSX: BNS, NYSE: BNS)–9–10–1 (CAD69.26)
• Bird Construction Inc (TSX: BDT, OTC: BIRDF)–4–2–1 (CAD15.46)
• Brookfield Real Estate Services Inc (TSX: BRE, OTC: BREUF)–0–1–0 (CAD15.00)
• Brookfield Renewable Energy Partners LP (TSX: BEP-U, NYSE: BEP)–4–6–2 (CAD34.14)
• Canadian Apartment Properties REIT (TSX: CAR-U, OTC: CDPYF)–7–4–0 (CAD23.89)
• Cineplex Inc (TSX: CGX, OTC: CPXGF)–7–4–2 (CAD42.54)
• DH Corp (TSX: DH, OTC: DHIFF)–3–5–1 (CAD33.29)
• Dundee REIT (TSX: D-U, OTC: DRETF)–4–4–0 (CAD32.71)
• EnerCare Inc (TSX: ECI, OTC: CSUWF)–4–3–0 (CAD11.88)
• Innergex Renewable Energy Inc (TSX: INE, OTC: INGXF)–2–6–1 (CAD10.76)
• Keyera Corp (TSX: KEY, OTC: KEYUF)–5–7–0 (CAD77.10)
• Northern Property REIT (TSX: NPR-U, OTC: NPRUF)–4–5–0 (CAD31.07)
• Pembina Pipeline Corp (TSX: PPL, NYSE: PBA)–7–3–1 (CAD42.60)
• RioCan REIT (TSX: REI-U, OTC: RIOCF)–4–5–0 (CAD31.01)
• Shaw Communications Inc (TSX: SJR/B, NYSE: SJR)–3–11–5 (CAD26.17)
• Student Transportation Inc (TSX: STB, NSDQ: STB)–2–3–1 (CAD7.47)
• TransForce Inc (TSX: TFI, OTC: TFIFF)–6–6–0 (CAD25.65)

Aggressive Holdings

• Acadian Timber Corp (TSX: ADN, OTC: ACAZF)–0–1–1 (CAD12.50)
• Ag Growth International Inc (TSX: AFN, OTC: AGGZF)–7–4–0 (CAD49.36)
• ARC Resources Ltd (TSX: ARX, OTC: AETUF)–10–10–1 (CAD33.82)
• Chemtrade Logistics Income Fund (TSX: CHE-U, OTC: CGIFF)–1–4–1 (CAD22.25)
• Crescent Point Energy Corp (TSX: CPG, OTC: CSCTF)–22–1–1 (CAD50.27)
• Enerplus Corp (TSX: ERF, NYSE: ERF)–14–5–0 (CAD25.24)
• Extendicare Inc (TSX: EXE, OTC: EXETF)–0–3–2 (CAD7.44)
• Lightstream Resources Ltd (TSX: LTS, OTC: LSTMF)–2–14–2 (CAD6.99)
• Magna International Inc (TSX: MG, NYSE: MGA)–12–9–1 (CAD120.16)
• Newalta Corp (TSX: NAL, OTC: NWLTF)–5–4–1 (CAD22.11)
• Noranda Income Fund (TSX: NIF-U, OTC: NNDIF)–1–0–0 (CAD7.00)
• Parkland Fuel Corp (TSX: PKI, OTC: PKIUF)–5–4–0 (CAD21.78)
• Peyto Exploration & Development Corp (TSX: PEY, OTC: PEYUF)–14–5–2 (CAD42.72)
• ShawCor Ltd (TSX: SCL, OTC: SAWLF)–4–2–0 (CAD60.60)
• Vermilion Energy Inc (TSX: VET, OTC: VEMTF)–13–7–1 (CAD77.22)