The country added 12,000 jobs in August and analysts are saying this is another sign the Canadian economy will return to growth in 2015’s third quarter.
A jump in full-time jobs of 54,000 was offset by a loss of 42,000 part-time positions.
Despite this growth, the Canadian unemployment rate gained ground, growing two ticks to 7% from 6.8%, where it had sat for six consecutive months. The increase isn’t necessarily a bad sign, however, because in this case it was related to a jump in the participation rate.
“Sometimes a rise in the unemployment rate is actually something to cheer about, if it’s the result of more people looking for work than outright job losses,” CIBC World Markets wrote in a note to investors.
British Columbia also had employment gains in August; an overall 3,100 new jobs were added in the month and the unemployment rate remained stable at 6%. The province, like the country as a whole, saw net gains in full-time work, adding almost 17,000 full-time jobs and shedding just under 14,000 part-time jobs.
Nationwide, public administration and education had the biggest increases, up 14,000 and 11,000, respectively. Meanwhile, manufacturing and construction both lost 3,000 jobs each.
BMO Financial Group’s chief economist Douglas Porter said this latest data country-wide are all “pointing in the right direction.”
“While no ball of fire, Canada’s unemployment backdrop simply refuses to follow the recession script,” he said.
Leslie Preston, economist for TD Economics, was less impressed with August’s job figures.
“It is not a positive economic sign that the more cyclical industries like construction and manufacturing are shedding jobs,” Preston said.
“While it is good news that hiring in sectors like public administration and educational services are offsetting these losses for the time being, these gains are unlikely to be sustained, and we do expect hiring overall in Canada’s economy to slow through the remainder of 2015.”
Preston said overall, however, the Canadian economy should return to growth in Q3.
Porter said this latest information, in combination with other factors such as strengthening trade and export data, makes a Bank of Canada rate cut less likely. Canada’s central bank is expected to make its next overnight rate announcement September 9.
This job strength wasn’t enough to bump up the Canadian dollar, however, as the United States announced even stronger gains, having added 173,000 jobs in August. The loonie plummeted almost half a cent, landing at 75.3 cents U.S. as of press time.
