A cyclist rides past a ‘We’re Hiring’ sign in Montreal on July 13, 2023. The Canadian Press/Christinne Muschi
Canada’s job statistics exceeded the predictions of economists for July, with the unemployment rate dropping to its lowest level in two years.
Canada experienced an unexpected increase of 75,100 jobs last month, according to Statistics Canada, a rise that far surpassed the expectations set by economists in a Reuters poll, who had predicted a modest increase of 16,500 jobs.
The new jobs were split between full- and part-time work, the labour force survey released Aug. 7 by StatCan found.
Employment has risen by 0.9 percent—the equivalent of 181,000 jobs—since April, driven by a rise in full-time work, StatCan said. Meanwhile, the nation’s unemployment rate dipped 0.1 percentage points from June to 6.4 percent and average hourly wages were up 2.8 percent in July on an annual basis.
The majority of job increases in July occurred within the wholesale and retail trade sectors, which collectively added 21,000 positions; however, this sector remains down by 50,000 jobs compared to the same time last year.
The finance, insurance, real estate, rental, and leasing sectors reported the addition of 18,000 jobs last month, while the professional, scientific, and technical services sector experienced a growth of 17,000 jobs.
The public administration sector reported a job loss of 15,000 last month, while the agricultural sector saw a decline of 9,600 jobs.
The unemployment rate among youth held steady at 12.6 percent in July, but reflected a decrease of 1.9 percentage points compared to the same time last year, StatCan said.
Bank of Montreal chief economist Douglas Porter noted in an Aug. 7 post that the rise in jobs mimics the GDP bounce from weakness at the beginning of the year.
“Perhaps also like the GDP results, the recent job growth likely exaggerates the underlying strength in the economy,” he said in a note to investors. “Even with the flashy headlines, we suspect that the yearly trend in both is more indicative of economic reality—job growth of just under 1 percent year-over-year and GDP growth of just under 2 percent year-over-year.”
TD director and senior economist Andrew Hencic said while the labour market is exhibiting signs of recovery, the 6.4 percent unemployment rate still indicates an economy functioning with a degree of slack.
“Together with the prospect of new tariffs coming into effect on Aug. 19, the downside risks to the economy remain,” he said in an Aug. 7 post. “We continue to expect the unemployment rate to gradually decline in the coming months as the economy deals with the volatility in energy prices and potentially more trade headwinds.”
