Canadian employment unexpectedly fell in August led by a record drop in private-sector jobs, undermining policy makers’ optimism about Canada’s economic recovery.
Employment fell by 11,000 and the jobless rate was unchanged at 7.0 percent, Statistics Canada said today in Ottawa. Economists surveyed by Bloomberg News projected a 10,000 job increase and unchanged unemployment according to median forecasts in Bloomberg surveys.
The employment loss masked the 111,800 decline in private-sector jobs, a record amount that equaled the 1 percent drop set in April 1982. “Certainly it’s not an encouraging trend” in employment, Paul Ferley, assistant chief economist at Royal Bank of Canada, said by telephone from Toronto.
The economy’s growth rate won’t be sustained unless “labor markets continue to make a contribution with increased hiring.”
Canada’s currency fell after the report. It was 0.1 percent weaker at C$1.0876 versus the U.S. dollar at 10:05 a.m. in Toronto.
The yield on two-year government bonds fell 2 basis points to 1.11 percent. Finance Minister Joe Oliver had touted Canada’s job market as a sign of strength compared with global peers ahead of an election scheduled for next year.
The Bank of Canada affirmed this week that it will take two years to use up slack in the economy as it kept a neutral bias on its 1 percent policy interest rate, and said that business investment and exports need to take over from consumers as the driver of growth.
“In this environment of productivity-led growth, the Bank of Canada will continue to feel zero urgency about talking about raising rates, let alone actually raising them,” Doug Porter, chief economist at BMO Capital Markets in Toronto, wrote in a research note.
Participation Rate
Part-time employment fell by 8,700 in August and full-time by 2,300, Statistics Canada said today. Another 20,800 people left the labor force in August, lowering the participation rate to 66.0 percent, the lowest since November 2001.
Retail and wholesale employment led the declines by industry with a reduction of 26,500 positions. Transportation and warehousing fell by 14,700 and manufacturing by 11,000. Construction employment increased by 24,400 in August, and the public-sector grew by 14,000.
Average hourly wages of permanent workers rose by 2.3 percent in August from a year earlier, exceeding the 2.1 percent pace the prior month.
Productivity Gains
Before the data were published, a fire alarm forced an evacuation of the room where journalists read the report under embargo.
The release occurred as scheduled at 8:30 a.m. in Ottawa. In a separate report, Statistics Canada said labor productivity rose 1.8 percent in the second quarter, the fastest since the first three months of 1998.
Statistics Canada on Aug. 15 corrected its July job report to show employment rose by 41,700 that month. It retracted figures from a week earlier that showed a gain of 200 positions, and said the error happened when staff made an incorrect update to a data processing program.
bloomberg.com
Employment fell by 11,000 and the jobless rate was unchanged at 7.0 percent, Statistics Canada said today in Ottawa. Economists surveyed by Bloomberg News projected a 10,000 job increase and unchanged unemployment according to median forecasts in Bloomberg surveys.
The employment loss masked the 111,800 decline in private-sector jobs, a record amount that equaled the 1 percent drop set in April 1982. “Certainly it’s not an encouraging trend” in employment, Paul Ferley, assistant chief economist at Royal Bank of Canada, said by telephone from Toronto.
The economy’s growth rate won’t be sustained unless “labor markets continue to make a contribution with increased hiring.”
Canada’s currency fell after the report. It was 0.1 percent weaker at C$1.0876 versus the U.S. dollar at 10:05 a.m. in Toronto.
The yield on two-year government bonds fell 2 basis points to 1.11 percent. Finance Minister Joe Oliver had touted Canada’s job market as a sign of strength compared with global peers ahead of an election scheduled for next year.
The Bank of Canada affirmed this week that it will take two years to use up slack in the economy as it kept a neutral bias on its 1 percent policy interest rate, and said that business investment and exports need to take over from consumers as the driver of growth.
“In this environment of productivity-led growth, the Bank of Canada will continue to feel zero urgency about talking about raising rates, let alone actually raising them,” Doug Porter, chief economist at BMO Capital Markets in Toronto, wrote in a research note.
Participation Rate
Part-time employment fell by 8,700 in August and full-time by 2,300, Statistics Canada said today. Another 20,800 people left the labor force in August, lowering the participation rate to 66.0 percent, the lowest since November 2001.
Retail and wholesale employment led the declines by industry with a reduction of 26,500 positions. Transportation and warehousing fell by 14,700 and manufacturing by 11,000. Construction employment increased by 24,400 in August, and the public-sector grew by 14,000.
Average hourly wages of permanent workers rose by 2.3 percent in August from a year earlier, exceeding the 2.1 percent pace the prior month.
Productivity Gains
Before the data were published, a fire alarm forced an evacuation of the room where journalists read the report under embargo.
The release occurred as scheduled at 8:30 a.m. in Ottawa. In a separate report, Statistics Canada said labor productivity rose 1.8 percent in the second quarter, the fastest since the first three months of 1998.
Statistics Canada on Aug. 15 corrected its July job report to show employment rose by 41,700 that month. It retracted figures from a week earlier that showed a gain of 200 positions, and said the error happened when staff made an incorrect update to a data processing program.
bloomberg.com
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