Economy adds jobs for eighth month
The pace of growth slows from previous months
The economy extended its winning streak in July, posting its eighth consecutive month of job growth while the unemployment rate dropped to its lowest point since the start of the financial crisis nearly nine years ago.
The unemployment rate fell 0.2 percentage points to 6.3 per cent, a level not seen since October 2008, as the number of people looking for work declined, Statistics Canada reported Friday.
Waterloo Region’s unemployment rate also fell to its lowest level in nine years. It fell 0.4 percentage points to 4.8 per cent, the lowest it has been since April 2008.
Among Canadian cities, only Kelowna (3.6 per cent), Quebec City (four per cent), Guelph (4.5 per cent) and Victoria (4.6 per cent) had a lower unemployment rate last month.
Statistics Canada said there were 294,400 people working in the region last month, up from 291,600 in June. The number of people who were unemployed and looking for work fell to 14,900 from 16,000.
Nationally, the decrease in unemployment came as the economy pumped out 10,900 net new jobs for the month. That followed staggering employment growth of 45,300 in June and 54,500 in May.
“We can forgive the economy for taking a bit of a breather on job gains in July, given how torrid the pace has been in the prior two months,” Avery Shenfeld, chief economist of CIBC Capital Markets, said in a note to clients.
The July data was fuelled by the addition of 35,100 full-time jobs, offset by the loss of 24,300 parttime positions.
Compared with a year ago, the number of jobs has increased by 388,000, driven by a surge in 354,000 full-time positions.
However, the positive job figures were dampened by the latest numbers on Canada’s trade deficit, which ballooned to $3.6 billion in June from a shortfall of $1.4 billion the previous month.
Benjamin Reitzes, Canadian rates and macro strategist at BMO Capital Markets, said there were some one-time factors affecting the trade numbers.
“You had some very large declines in exports of metals, gold in particular,” he said, noting oil prices have also fallen. That weighed heavily on the number.
Statistics Canada said exports fell 4.3 per cent to $46.5 billion. On the other side of the ledger, imports gained 0.3 per cent to $50.1 billion.
The latest economic data follows a decision by the Bank of Canada last month to raise its key interest rate target to 0.75 per cent, its first increase in almost seven years.
Reitzes said BMO continues to expect the central bank to wait until October before it raises the rate again, noting that there are still plenty of economic figures to come before the decision.
“It’s tough to see anything really derailing them outside of broadly weaker numbers for October,” he said. “They’ve been clear they want to take back the 50 basis points of easing they put in 2015, so a hike in October would do that.”
Breaking down the jobs report, the wholesale and retail trade sector gained 22,000 jobs, information, culture and recreation added 18,000 and manufacturing saw an increase of 14,000.
About 32,000 jobs in educational services were lost, mainly in Ontario and Alberta.
Regionally, employment in Ontario and Manitoba rose by 26,000 and 4,800, respectively. Alberta lost 14,000 jobs.
The Canadian economy gained 10,900 jobs in July, less than the 45,300 created in June, but still enough to reduce the unemployment rate to 6.3 per cent.