Canadian economy records loss in net jobs in August, jobless rate rises to 6 pct

Canada recorded a fall in net jobs in the month of August. The Canadian economy recorded a loss of 51.6k net jobs in the month. The jobless rate rose 0.2 percentage points to 6 percent. Over 40.4k full-time positions were added in August; however, these were swamped by a -92.0k drop in part-time employment, more than reversing July’s gains. By type, the losses were spread throughout both types of employment: the public sector shed 38.0k net positions, and the private sector 30.7k. Self-employment rose 17.2k.

Sector-wise, the losses showed up in professional services, while wholesale and retail trade and construction saw losses of 19.6k and 16.4k, respectively.

Region wise, net losses were almost entirely concentrated in Ontario, which saw a loss of 80.1k jobs, sending the jobless rate up to 5.7 percent. Alberta saw a strong performance, adding 16.2k net positions and drawing a similar number people back to the labor force for an unchanged jobless rate of 6.7 percent, noted TD Economics in a research report.

In spite of the fall in employment, aggregate hours worked saw a slight rise of 0.2 percent sequentially and 1.6 percent year-on-year. Average hourly earnings for permanent employees slowed to 2.6 percent year-on-year from July’s 3 percent.

The trend pace of job gains fell around 10k, as year-on-year job gains slowed to 0.9 percent. Of note, these gains have been by and large in full-time employment as part-time work fell 4.3 percent year-on-year after today’s marked fall.

For the Bank of Canada, this report might be put into the wider context of slowing trend job gains in line with an economy operating near capacity.

“Given this week's messaging, we continue to see October as the likely timing for the next monetary policy interest rate hike. To the extent that wage growth remains soft (and the softness is confirmed in the Bank's preferred measures), a slower pace of hikes thereafter remains likely”, added TD Economics.

At 14:00 GMT the FxWirePro's Hourly Strength Index of Canadian Dollar was highly bullish at 130.448, while the FxWirePro's Hourly Strength Index of US Dollar was neutral at -42.3022. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex