Manufacturing AUTOMATION

Unemployment rate stays at seven per cent in August: Statistics Canada

September 5, 2014
By Steve Rennie The Canadian Press

Canada’s economy unexpectedly shed jobs in August thanks to heavy losses in the private sector, raising the eyebrows of economists who widely expected a modest gain in Statistics Canada’s flagship monthly report.

The national statistical agency reported Friday that the economy lost 11,000 mostly part-time jobs in August. Economists had widely expected a net gain of around 10,000 jobs.

A whopping loss of 112,000 jobs in the private sector was only partly offset by more people turning to self-employment and the continued churning out of jobs in the public sector.

But some economists, still reeling after Statistics Canada botched its July job numbers, raised concerns about the latest figures.


The country’s national number-cruncher was forced to issue a major correction to its employment survey last month after wrongly reporting that the economy gained a paltry 200 jobs in July. That number, Canadians found out a week later, was actually supposed to be 42,000.

This time around, some economists were skeptical about the staggering job losses in the private sector and equally surprising gains in the number of self-employed people.

“Guess what? We again advise clients to be very careful with the Canadian jobs numbers,” Scotiabank economists Derek Holt and Dov Zigler wrote in a note to clients.

Both the rise in the number of self-employed people and the private-sector job losses are monthly records going back to when Statistics Canada started the labour force survey in 1976, Holt and Zigler said.

“What an utterly fascinating pair of coincidences,” they wrote. “A data quality/sampling issue may be in play again here as I just can’t believe such volatility in either number.”

The unemployment rate in August remained unchanged from the previous month at seven per cent.

“After a string of solid economic reports, Canadian employment delivered yet another shocker, with no computer error to blame this time,” CIBC chief economist Avery Shenfeld said. “All told, soft numbers will at least take a bit of a shine off what has been an improving picture for Canada, particularly given softer than expected readings today out of the U.S.”

Statistics Canada said fewer young people and women had jobs in August. The number of people between the ages of 15 and 24 working fell by 20,000 during the month. Employment fell by 18,000 among women aged 25 to 54.

Men, however, fared better. The number of men between the ages of 25 to 54 with jobs rose by 36,000 in August.

Employment rose in Nova Scotia and New Brunswick, but fell in Newfoundland and Labrador and Alberta, which, to one economist at least, was a sign that Canada’s economy struggled to churn out jobs.

“The fact that private sector payrolls are unchanged from a year ago, and now even Alberta appears to be cooling a tad tells us all we need to know about the sluggish state of Canada’s job market,” said Doug Porter, chief economist with BMO Capital Markets. “The offset is that productivity is now stepping into the void, and helping keep overall economic growth on track.”

Canada’s gross domestic product is still on track to grow more in 2014 than it has in the past two years, added Porter, who says “productivity is what circles that square.”

That puts no added pressure on Bank of Canada governor Stephen Poloz to tinker with interest rates any time soon.

On Wednesday, the central bank held its key interest rate steady at one per cent, indicating it does not foresee enough of a change in Canada’s economic fortunes to adjust the rate from the same level it has held for the last four years.

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