Canada’s economy adds jobs in August; jobless rate rises to 7%

The Canadian economy gained 12,000 jobs in August, bolstered by a gain in full-time employment, but more people were looking for work and the unemployment rate ticked higher for the first time in months, Statistics Canada said Friday.

The federal agency said the unemployment rate increased to 7.0 per cent for the month, up 0.2 from 6.8 per cent, where it had held steady for six consecutive months.

Economists had expected the economy to lose 4,500 jobs in August and the unemployment rate to remain at 6.8 per cent, according to Thomson Reuters.

The overall increase came as the number of full-time jobs grew by 54,400, offset in part by a drop of 42,400 part-time jobs.

The job numbers follow trade data earlier this week that were stronger than expected, adding strength to the case that the economy is improving after slipping into a recession in the first half of the year. Statcan says the economy grew in June, raising hopes that the dip was short-lived and that the second half of the year would show growth.

The Bank of Canada has cut its key interest rate twice this year in an effort to provide a cushion for the economy, which has been hit hard by the slump in oil prices that began last year.

The central bank, which makes its next interest rate announcement next week, has predicted the economy will grow at an annual pace of 1.5 per cent in the third quarter before picking up to a 2.5 per cent pace in the last three months of the year.

Friday’s job report says Saskatchewan led the way in August as it added 4,000 jobs, while Newfoundland and Labrador added 3,100. Manitoba added 2,700 and New Brunswick increased by 2,400. There was little change in the other provinces, Statistics Canada said.

Public administration employment increased by 14,000 in August, while educational services gained 11,100 jobs.

Overall public sector employment gained 27,200 for the month, while the private sector gained 6,300 jobs.

The number of self-employed workers dropped by 21,600.

Statistics Canada also reported Friday that the unemployment rate for students aged 15-24 over the summer months from May to August was 16.8 per cent, similar to where it was during the same time last year.

That compared with an unemployment rate of 10.3 per cent for non-students in the same age category.

In a separate report, Statistics Canada reported labour productivity of businesses slipped 0.6 per cent in the second quarter following a 0.5 per cent decrease in the first quarter.

The agency said output of businesses decreased at a similar rate to the first quarter, while hours worked continued to increase.

Meanwhile, in the U.S., the unemployment rate tumbled to 5.1 per cent – the lowest since April 2008 – as employers added 173,000 jobs, complicating the U.S. Federal Reserve’s decision whether to raise rates in two weeks.

With files from The Associated Press

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