Employment ‘really going nowhere’
Statistics reveal modest gain in full-time jobs
OTTAWA • Staying true to its usual see- saw pattern, employment growth in Canada rebounded in August by an amount almost equal to the number of jobs lost in the previous month.
“Usually it’s two steps forward and one step back. In the current environment, it’s one step forward and one step back,” said Douglas Porter, chief economist at BMO Capital Markets. “We’re really going nowhere.”
Granted, the economy did manage to turn out some additional jobs in August, Statistics Canada reported Friday.
But at a net level of just 26,200, that’s still within the federal agency’s mathematical margin of error and comes after a decline of about 31,200 in July.
Still, full- time hires dominated the labour market last month, with 52,000 net jobs created — most of them in the public sector, the federal data agency said.
And while the unemployment rate edged up by 0.1 point to seven per cent in August, that reflected an increase in the number of people now ready and willing to look for work rather than giving up.
Forecasters had pegged overall job gains last month at anywhere from 5,000 to 15,000.
“This is a very volatile series, and we shouldn’t put too much weight on any given month,” said economist Brian DePratto at TD Economics.
“From a longer- term perspective, Canadian labour markets remain consistent with the economic lethargy that has characterized the first half of this year.”
The tentative nature of the jobs market is reflected in the uncertain growth of the economy itself — a factor that continues to keep the Bank of Canada on the sidelines, with its key interest rate unchanged at 0.5 per cent since July, 2015.
Governor Stephen Poloz and his monetary policy council are still waiting for more positive indicators, domestically as well as globally, before considering any level-lending adjustments.
In fact, private-sector analysts are not anticipating a move by the central bank — neither up, nor down — until mid- or late 2017.
The economy contracted by an annualized 1.6 per cent in the second quarter of 2016, with much of the decline attributed to the Alberta wildfires that cut into oil production at the same time as crude prices continued to suffer from the global price collapse in the energy sector.
In the first quarter, by comparison, gross domestic product grew by 2.5 per cent. Many forecasters anticipate a rebound of about 3.5 per cent in the third quarter, followed by slightly weaker growth of around two per cent in the final three months of this year.
Statistics Canada said full- time employment rose by 52,200 in August, while part- time positions shrank by about 26,000.
Employment numbers were up in Quebec and in Newfoundland and Labrador, but jobs declined in New Brunswick, the agency said, adding there was little change in the other provinces.
“The bigger story is that the economy really is struggling to turn out many new jobs, on balance,” BMO’s Porter said.
“Another way to arrive at that same conclusion, is the unemployment rate remains studiously stuck at something close to seven per cent — that’s exactly where we were a year ago, and that’s pretty much what we’ve averaged since early 2013.”
Seven per cent is also the average jobless rate over the past four years.
By industry, the resources sector — including oil and gas extraction — added 4,400 positions in August. Construction gained 7,400 jobs and manufacturing added 2,900.
The l argest gain was in public administration, which expanded by 16,300 positions.