Canadian economy adds 22.2k jobs in August, trend to remain healthy in 2017

Canadian economy saw gains in job in August. The economy added 22.2k net positions, which was enough to bring the jobless rate slightly lower to 6.2 percent close to pre-crisis lows. The mix of jobs was slightly unfavourable, as part0time work rose sharply by 110.4k and full-time positions dropped 88.1k. Both public sector and private sector witness modest declines in net employment, falling 8.3k and 2.1k, respectively. Self-employment filled the void by increased 32.7k.

Throughout industries, the goods-producers saw an overall drop of 13.7k. This was mainly driven by manufacturing and natural resources that recorded a drop in employment of 11.1k and 7.7k, respectively. The services sector recorded a positive print, where employment rose 35.9k as net employment gains were recorded throughout most of the major industry groups.

Region wise, Ontario drove the gain, adding 31.1k net positions, enough to lower the provincial jobless rate to 5.7 percent, a level that was seen around the turn of the millennium. Employment remained flat to slightly down across the remaining provinces.

The hours worked and wage rate figures were fairly encouraging. Hours worked were up 2.2 percent year-on-year despite the climb in part-time work, aided by a fall recorded at this time last year. Similarly, the hourly wage rate rose 0.5 percentage points to 1.8 percent year-on-year, continuing the acceleration seen last month, noted TD Economics in a research report.

August witnessed another month of job gains, and yet another month with mixed details. Part-time job growth, and self-employment drove the gains, resulting in a slight tick-back in aggregate hours worked. The drop of 88k in full-time work was sufficient to erase the better part of the earlier three months’ gains in this category.

Still, details cannot be mixed if they are all bad, and the rise in the hourly wage rate to 1.8 percent year-on-year is encouraging to see, especially when compared with the subdued growth seen earlier in the year. In all, while the August job figures hardly paint a picture of strength, this is a noisy series, and the trend continues to be a healthy one in 2017, stated TD Economics.

“The further rise in wages is likely to provide more assurance to the Bank of Canada that overall price pressures are beginning to turn the corner, further supporting their decision to hike this week, and consistent with additional tightening before the year ends”, added TD Economics.

At 15:00 GMT the FxWirePro's Hourly Strength Index of Canadian Dollar was highly bullish at 104.437, while the FxWirePro's Hourly Strength Index of US Dollar was neutral at -45.3632. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex

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