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Statistics Canada to Revise July Job Numbers Because of “Error” in Initial Estimate

H.S. Borji
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Statistics Canada to Revise July Job Numbers Because of “Error” in Initial Estimate

Statistics Canada is rushing to release a revised estimate of the July jobs report after the agency said it detected an error in the processing of last week’s market-moving data release.

The Ottawa-based statistics agency retracted its previous report and said on Tuesday it would issue revised data on August 15.

“An error has been detected in the processing of the August 8 Labour Force Survey release. This error impacts only the July 2014 estimates,” StatsCan said in an official press release.

“Statistics Canada takes this matter very seriously and is immediately launching a review of the data verification processes in place. This does not affect other statistical programs. A report on the results of the review will be published on the Statistics Canada website as soon as it is available.”

StatsCan declined to elaborate on what sort of error had been detected, but said it has since been corrected. Analysts expect the revision to be fairly significant.

The influential jobs report is one of the most closely followed economic releases. It is used by investors, analysts and policymakers to gauge underlying economic trends in Canada.

Last week’s release showed the Canadian economy added just 200 jobs in July, as the six-month moving average for job growth fell from 8,800 to 3,900. Economists forecast a monthly gain of around 20,000 jobs.

The disappointing reading was due to an unusually high number of layoffs in full-time workers.

Full-time employment declined 59,700 last month, while full-time work increased 60,000, the initial estimate showed.

In the 12 months through July, full-time work declined 3,100, while part-time employment increased 118,500.

The unemployment rate fell from 7.1 percent to 7 percent as fewer people participated in the workforce. The initial estimate said 35,400 people stopped searching for work last month, as the participation rate dipped from 66.1 percent to 65.9 percent, a 13-year low.

Regardless of this week’s revision, July figures won’t detract from the view the Canadian labour market has struggled over the past year, with employers taking turns adding and destroying jobs on a monthly basis. Canada shed 9,400 jobs in June, following a gain of 26,000 the previous month.

Overall employment increased just 0.4 percent in the 12 months through June, which translates into 72,000 jobs. That was the lowest year-over-year growth rate since February 2010.

The July estimate said the economy added 115,300 jobs between in the 12 months through July.

This isn’t the first time StatsCan has come under scrutiny. In the spring the auditor general criticized the agency’s labour force survey, claiming it was too vague and offered little value to job-seekers.

Job creation has been a central pillar of the Conservative government’s economic action plan. Gaps in the monthly labour force survey have raised skepticism about Canada’s labour market recovery, which according to the Bank of Canada has been over-stated. This could create fresh headaches for the Conservatives ahead of the 2015 federal elections.

Canada’s unemployment rate peaked at 8.7 percent at the height of the recession in August 2009. The recession of 2007-09 destroyed 430,000 Canadian jobs.

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