Last Updated on January 24, 2019
Canada’s economy created more jobs than expected in August and the unemployment rate increased as more people searched for work.
Despite an addition of a net 12,000 jobs in August, the unemployment rate rose to 7.0% after holding steady at 6.8% for six consecutive months, Statistics Canada said Friday.
The report indicates “there’s some momentum in the economy,” CIBC World Markets economist Avery Shenfeld said in a note. “Sometimes a rise in the unemployment rate is actually something to cheer about, if it’s the result of more people looking for work rather than outright job losses.”
The jobs report came three days after Statistics Canada confirmed that Canada’s gross domestic product shrank in the first two quarters of 2015. The Canadian economy has been hit hard by sharply lower oil prices, which have driven down business investment and weakened the value of the Canadian dollar. But economists have pointed to resilience in Canada’s jobs data as evidence that weakness in the economy isn’t widespread.
In August, the number of full-time positions rose by 54,400 while the number of people employed part-time fell 42,400. The number of public sector jobs rose by 27,200 while the private sector gained 6,300 jobs in the month, Statistics Canada said.
While employment in the goods-producing sector dropped 5,200 in August, the services sector, accounting for roughly two-thirds of Canadian gross domestic product, added 17,200 workers.
The Bank of Canada’s next interest-rate decision is next Wednesday. The central bank has already lowered the key overnight interest rate twice this year, bringing it to 0.5%.
According to Statistics Canada, on a 12-month basis Canada has added 193,300 jobs with all of the net gains concentrated in full-time work.