Canada’s economy shed jobs for the first time in five months in August, pushing the unemployment rate up a tick to 7.3 per cent as workers in construction, transportation and warehousing struggled to find employment.
The loss of employment was small — 5,500 — but it was the second consecutive month that jobs growth was virtually non-existent in Canada, a clear signal that the economy continues to struggle.
The only good news in the report Friday was that full-time employment rose by 25,700, all in the public sector.
The poor result coincides with the reported flat reading that also occurred in the U.S. last month, although Canada’s unemployment rate remains about two percentage points lower.
Economists had expected a modest 21,500 pick-up in employment following July’s slight gain, in part fuelled by education jobs related to the return of school season in September.
But there were few signs of an education bump. Instead, the big pick-up was in the health care and social assistance sector, which gained 50,000 jobs.
Meanwhile, there were significant losses in the key goods producing sectors. Construction fell by 24,000, transportation and warehousing declined by 14,000 and the natural resource industries shed 12,000 workers. Students had a hard time all summer with an unemployment rate of 17.2 per cent, well above the 14 per cent level that existed prior to the recession.
On aggregate, the job losses occurred in the private sector and among part-time workers.
Thanks to robust results in the early part of 2011 when the economy was stronger, Canada’s has till managed to create 193,000 jobs this year, the agency said. Over the past 12 months, 223,000 jobs have been added.
“Over this period, full-time employment increased by 2.2 per cent (300,000), part-time work declined 2.3 per cent (77,000), and total actual hours worked rose by 2.6 per cent,” Statistics Canada noted.
Economists expect a bleaker second half of the year, however, particularly following the turmoil in financial markets that began in August and continuing fears over sovereign debt in Europe and the United States.
Earlier this week, Bank of Canada governor Mark Carney warned that the second half would be weaker than previously predicted and that the export sector would face difficulties in foreign markets due to decreased demand and the high dollar.
Regionally, there were few dramatic shifts in employment. However, the unemployment rate in Newfoundland jumped 1.8 points to 13.7 per cent, and Quebec’s rose 0.4 points to 7.6 per cent, largely due to increases in the number of people looking for work.