Canada adds jobs in August at a rate above forecast

Despite continuing concerns about factory output seeing a slight decline and a very fragile export market due to the continued paucity of the US recovery there was extremely good news about the Canadian economy this week specifically on the jobs front. Concerns that arose from July results may have been unfounded (employment numbers had declined that month) as a healthy return along the path to pre-recession employment numbers continued in earnest, emphasising the feeling that the recovery is still on track albeit with some more hesitancy than earlier in the year. The Canadian economy added more new than had been forecasted for August, and the spike was all the more encouraging by the service sector trading up many part time positions for full time jobs. In total just under 36,000 net jobs were added last month although a growing labour force resulted in the unemployment rate resting at 8.1%. The unemployment rate has not rested below 8.0% since the beginning of 2009. The results are more steady than spectacular as there was a net decline in private sector jobs offset by growth within the public sector. In addition, the currency market responded immediately with the US dollar reaching new highs for the month of September (and the best in three weeks) at C$1.0288 after the report was released.

While the results could not mirror the record gain of over 105,000 jobs seen in April the net increase was more than 20% beyond what had been forecast, perhaps most encouraging aspect is that the reliance on part-time jobs for growth was finally turned upside down in August with more full-time jobs being the welcome trend that signifies the ‘right type of jobs’ being added to the market.

Calgary and other Canadian cities continue to see job growth in 2010

As mentioned the service sector shone, by ballooning by some 44,000 jobs but the goods producing sector lost just over 8,000 employees. A large spike was seen in  education services of 68,000+ jobs which follows on from many months of decline. Upswings were also noted in the professional, technical, scientific and construction fields. As ever seasonal variations contribute to many of the changes as evidenced by a loss of manufacturing employment in excess of 25,000 which reversed a trend of recent gains. The economy will also be invigorated by a slight increase in hourly earnings which should continue the slow but steady return of consumer spending. Whether the employment figures will hasten an increase in base interest rates remains to be seen but the experts are still expecting something next month.

Regionally the largest increases were shown to be in Québec, then followed by Saskatchewan, Newfoundland and Labrador. With 2010 more than two thirds complete the recovery in employment shows in excess of 90% of the positions lost during the recession as now having returned to the labour market overall. The weeks ahead will provide additional manufacturing and trade statistics which ideally will support the case for the continued stability of the economic condition.

Reports and statistics for this article was forced from Statistics Canada.