Canada adds more jobs than expected in August, yearly growth soft

Fri Sep 9, 2016 10:15am EDT
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By Leah Schnurr

OTTAWA (Reuters) - Canada created more jobs than expected in August on increased hiring in the construction and services sectors, but the gains did not fully make up for recent declines in employment, pointing to a labor market that was struggling to gain momentum.

Canada added 26,200 jobs in August, Statistics Canada said on Friday, following two months of declines. The unemployment rate rose to 7.0 percent as more people were looking for work.

Economists were encouraged by the 52,000 gain in full-time work, but noted the report could be volatile month-to-month. Compared to a year ago, employment was up just 0.4 percent.

"It's still been a really challenging year for the job market," said Doug Porter, chief economist at Bank of Montreal.

"We're still seeing just modest job growth over the past year."

The economy shrank in the second quarter, hurt by the impact of wildfires in Alberta, but analysts expect to see a recovery in the third quarter.

The Bank of Canada earlier this week said it still expects growth to rebound in the second half of the year, but warned the economy could be weaker than it had anticipated.

The central bank is expected to hold interest rates steady until 2018, though a minority in the market are betting on an interest rate cut. [CA/POLL]   Continued...

File photo of a woman walking through the 2014 Spring National Job Fair and Training Expo in Toronto, April 3, 2014. REUTERS/Aaron Harris/File Photo