- Jimmy Jean, Economic Strategist at Desjardins Capital Markets
Canada's employment declined slightly in August, with private sector jobs recording the biggest drop and self-employment hitting the highest level on record. The Canadian economy shed a net 11,000 jobs in August following the previous month's gain of 42,000. Economists, however, expected a gain of 10,000 jobs. Canada cut 111,800 private-sector jobs, the largest one-month decrease on record for this category. This was compensated slightly by a 14,000 gain in public-sector payrolls, and a surge of 86,900 among the ranks of the self-employed. Nevertheless, the unemployment rate remained unchanged in August at 7%.
Employment gains in Canada have slowed in recent years, after a strong performance following the end of the 2008-2009 recession. The slow pace of hiring indicates the relatively large amount of spare capacity, or slack, in the Canadian economy, urging the Bank of Canada to maintain a neutral-rate policy. The central bank said in a rate decision last week that export growth is starting to accelerate but that more is needed before firms consider boosting hiring. Canada's participation rate, or the percentage of the working-age population either working or looking for work, declined in August to 66%, the lowest level since November 2001. The August employment report indicated 20,800 people dropped out of the labour force.
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