Canadian economy adds 34,300 jobs, but unemployment rate remains at 7.3
September 7, 2012 by The Canadian Press
Canada’s economy hammered out a surprisingly healthy 34,300 new jobs last month, topping expectations of only modest gains and completely reversing the previous month’s setback.
The details of the August jobs report from Statistics Canada were not as strong as the headline number suggested, however, as all the gains were part-time jobs. As well, there were heavy losses in the goods producing sector, which generally pays higher wages.
And the unemployment rate remained unchanged at 7.3 per cent as the labour force grew in step with the employment gains.
Bank of Montreal economist Doug Porter called the overall report “a little better than expected … (but) underwhelming.”
“I wouldn’t get too excited because a lot of the strength was on the surface” he explained. “It was due to a big rise in part-time jobs and there was actually a decline in hours worked.”
“A quick way to look at it was the unemployment rate was unchanged. It’s been unchanged from three months ago and it’s unchanged from a year ago.”
Particularly disconcerting was that 44,000 construction jobs were lost during the month, he said, many in Ontario, which shed 24,900 workers overall.
But given that analysts had expected only a 10,000 bump in employment growth in August, Jimmy Jean, economic analyst with Desjardins Capital Markets, pronounced the report satisfactory.
He noted that the latest performance brings the monthly jobs increase for the year back to an acceptable average of nearly 20,000.
“(That’s) a performance that needs to be appreciated in the current context. Once more, the Canadian job market shows its resilience to the headwinds,” he said.
As well, hourly wages continued to rise, to 3.8 per cent higher than last year from 3.6 per cent in July.
The Canadian result was far stronger than what occurred in the United States, which saw a miserly 96,000 jobs increase for the month, below expectations and below the growth needed just to keep up with labour market growth.
The Canadian dollar climbed versus the U.S. currency on the simultaneous release of both reports, rising 0.46 of a cent to 102.21 cents U.S.
The August report in Canada was almost a direct mirror image of the disappointing July data, when Statistics Canada reported the economy had shed 30,400 jobs. Even more striking, almost all the losses in July came in Quebec and were part time, whereas in August almost all the gains_ 32,500 _ were also located in that province and were part time.
The July numbers came as bad news for the governing Quebec Liberals, who at the time were in the middle of a tough re-election campaign they eventually wound up losing.
With the latest gains, Statistics Canada said employment in Canada has increased by one per cent, or by 177,000 jobs, over the past year, with most of the gains in full-time work. Over the past two months, the number of hours worked by Canadians has risen by 0.7 per cent.
But the August numbers went against the grain since all the increase came in part-time work, which added 46,700 employees, while there were 12,500 fewer full-time workers.
Meanwhile, goods producing industries shed 36,400 workers overall during the month, with construction dropping 44,000 jobs and manufacturing also down slightly.
The gainers were in the services sector, more than making up the slack by adding 70,600 jobs. Transportation and warehousing was up 37,000; professional, scientific and technical services, 20,000; building and other support services, 19,000; and natural resources up 8,800 workers.
Regionally, aside from Quebec, British Columbia, Saskatchewan and Manitoba also registered significant job increases, while Ontario saw the biggest decline.