Canada's job growth stalls; labor participation at 13-year low

Fri Aug 8, 2014 12:41pm EDT
Email This Article |
Share This Article
  • Facebook
  • LinkedIn
  • Twitter
| Print This Article | Single Page
[-] Text [+]

By David Ljunggren

OTTAWA (Reuters) - Canada's economy created a net 200 jobs in July, far fewer than analysts had expected, while labor force participation fell to a fresh 13-year low, the country's statistical agency reported on Friday.

The data confirmed the general sluggishness that has marked Canada's labor market in recent quarters and reinforced expectations the Bank of Canada is unlikely to raise interest rates any time soon.

Part-time employment rose by 60,000 jobs last month, while full-time jobs fell by 59,700, according to Statistics Canada. Analysts had forecast a net gain of 20,000 jobs after the loss of 9,400 positions in June.

"It highlights a very disappointing pace of job gains in Canada," said Camilla Sutton, Scotiabank's chief currency strategist, who described the drop in full-time employment as "shocking."

Canada's unemployment rate dipped to 7.0 percent from 7.1 percent because fewer people were looking for work. The labor force participation rate fell to 65.9 percent, the lowest level since October 2001.

The year-over-year employment gain was only 115,300 jobs, or 0.7 percent, while the six-month moving average for employment growth dropped to 3,900 from 8,800 in June.

The Canadian dollar CAD=D4 hit a session low of C$1.0965 to the U.S. dollar, or U.S. 91.20 cents, shortly after the release of the data, down from Thursday's close of C$1.0921, or 91.57 U.S. cents.

Analysts said the data provided breathing room for the Bank of Canada, which pays close attention to the labor participation rate and has said it will not consider a rate hike until it sees lasting signs of an economic recovery and pick-up in employment.   Continued...

Motorized mannequins hold signs that read "Hire Me" in Toronto May 23, 2014.   REUTERS/Mark Blinch