Jobs report ‘a mixed bag’: BMO’s Porter

Unemployment rate fell to nine-year low, but Canada lost 88,100 full-time positions

OTTAWA — Canada’s labour market posted its ninth-straight month of job gains in August to give the economy its longest monthly growth streak since before the financial crisis nine years ago.

Statistics Canada says last month’s increase of 22,200 jobs also helped nudge the unemployment rate down from 6.3 per cent in July to a nine-year low of 6.2. Hamilton’s unemployment rate in August was at 5 per cent, down from 5.4 per cent in July

An unemployment rate of 6.2 per cent approaches what economists refer to as “full employment,” defined as the lowest rate before a scarcity of job seekers starts to inflate wages and hit the economy.

Economists disagree on exactly what that unemployment rate is, but Maurice Mazerolle at Ryerson University’s Ted Rogers School of Management says it’s somewhere between five and six per cent.

Friday’s data showed the August growth was fuelled by less-desirable work, as the economy gained 110,400 part-time jobs and shed 88,100 full-time positions. The agency said most of the decline in full-time work was concentrated among Canadians 15 to 24 years old. The youth category also showed a notable decrease last month in participation as fewer young people looked for work.

The August numbers also showed a decline of 10,400 paid employee positions, while the number of people who described themselves as self-employed, including unpaid workers in f amily businesses, increased by 32,700.

“While very solid on the surface, the details of this report are generally sluggish, leaving a mixed bag,” BMO chief economist Doug Porter wrote in a research brief.

Looking at the bigger picture, the latest numbers said the labour market expanded 2.1 per cent compared with a year earlier with the addition of 374,300 net new jobs. Of those new jobs, 213,400 were full time.

The data provided yet another sign the economy continued to have momentum after a stronger-than-expected start to 2017 that has also prompted two interest rate hikes by the Bank of Canada.

The latest rate increase came earlier this week after a report showed Canadian economic growth expanded at an annual pace of 4.5 per cent from April to June.

Last month’s labour data showed wages grew 1.8 per cent compared with a year earlier for the biggest increase since last October.

By industry, the services sector gained 35,900 jobs while the number of factory positions fell by 13,700. The goods-sector slide was led by a loss of 11,100 manufacturing positions.

Ontario posted the only notable gain among provinces, while employment declined in Nova Scotia. The headline job numbers were little changed in the other provinces.