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Canadian employment declines in August

H.S. Borji
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Canadian employment declined in August, taming expectations the country’s labour market was improving in the second half of the year after struggling with consistency throughout much of 2014.

Overall employment in Canada decreased by 11,000 in August following a gain of 42,000 the previous month, Statistics Canada reported today in Ottawa. A median estimate of economists forecast employment levels to increase 10,000.

The jobless rate was unchanged at 7 percent after declining 0.1 percentage point the previous month.

Compared to August 2013, overall employment increased just 0.5 percent or 81,000, with most of the growth in part-time jobs. The total hours worked were virtually unchanged over the same period.

Part-time work declined 8,700 in August, official data showed. Full-time jobs declined 2,300.

The federal statistics agency came under fire last month after announcing it had detected an error in the processing of the initial jobs report. StatsCan had initially reported a net gain of just 200 jobs in July in its August 5 press release.

On an industry level, total employment fell sharply in wholesale and retail trade. Employment in this sector declined 27,000 in August, official data showed.

Employment in transportation and warehousing fell by 15,000. Year-on-year, however, employment in this sector was up 3.4 percent.

The construction sector increased payrolls by 24,000. Overall employment was little changed over year-ago levels.

Positive contributions were also made by professional services and public administration. Employment in each of these sectors increased 21,000.

Overall employment in the private sector declined by 112,000 last month, while public sector employment has been gradually improving since February 2014. Meanwhile, self-employment increased 87,000 after declining in July.

On a regional level, employment declined in the Alberta, the capital of Canada’s oil and gas sector. Employment was also down in much of the eastern Maritime region.

The Canadian labour market has struggled with consistency this year, which has given the Bank of Canada all the scope it needs to keep interest rates low. The BOC expects Canada’s economy won’t return to full capacity until the middle of 2016. However, a strong rebound in the second quarter, particularly in the export sector, raised optimism the economy was moving in the right direction.

The BOC made no changes to its rate target at this month’s policy meetings, which were held in Ottawa on Wednesday. The BOC has kept its target for the overnight rate at 1 percent since September 2010.

For all its woes, the Canadian labour market is expected to improve in the second half of the year, according to a study released last month by the Bank of Montreal, one of Canada’s largest financial institutions.

The BMO Hiring Report indicated Canadian businesses were planning on increasing payroll this year. The report said it expects export-related employment to improve considerably on the heels of stronger US demand and a weaker local currency. Hiring intentions among manufacturers will increase 18 percent in 2014. Net hiring intentions among service providers and retailers will increase 17 percent and 7 percent, respectively.

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