Tags: Canada | Jobs | Government | Workers

Public Sector Layoffs Weigh on Canada Job Market in July

Friday, 09 Aug 2013 09:20 AM

Record job losses in the public sector and scarce opportunities for youth led to unexpected weakness in the Canadian labor market in July, hinting at a sluggish start to the third quarter.

The economy lost a net 39,400 jobs during the month, and the unemployment rate ticked up to 7.2 percent from 7.1 percent in June, Statistics Canada reported on Friday.

Market players surveyed by Reuters had forecast the creation of 10,000 net new jobs in July, and an unemployment rate of 7.1 percent, unchanged from June.

"A definite disappointment," said David Tulk, chief macro strategist at TD Securities. "We sort of expected this as a continued hangover from the plus-95 (95,000 jobs) we saw in the month of May."

The jobs numbers, based on a household survey, are volatile from month to month so, despite their forecasts, many analysts had suspected a payback after stunning gains in May and a decline of only 400 in June.

On average over the past six months, some 11,000 net new jobs were created per month, compared with 27,000 from August 2012 to January 2013.

Almost all the jobs lost in July were in services, particularly healthcare and social assistance, with overall public sector employment down by 74,000 positions.

Employment among youth fell by a sharp 46,000, and summer employment for high school-aged students hit its lowest level since 1977, the federal agency said.

The Canadian dollar weakened to a session low immediately after the release of the data, trading at C$1.0348 to the U.S. dollar, or 96.63 U.S. cents, compared with C$1.0324, or 96.86 U.S. cents, at the close of the North American session on Thursday.

The report, an early indication of third-quarter economic growth after a slowdown in the second quarter, did little to change expectations the Bank of Canada will hold its benchmark interest rate at the current 1 percent until late 2014.

The Bank of Canada expects second-quarter annualized growth of just 1 percent but sees it bouncing back in the third quarter with a 3.8 percent gain.

In July, both full-time and part-time jobs disappeared, declining by 18,300 and 21,200, respectively.

On the bright side, 31,400 Canadians obtained private-sector jobs, and 13,500 joined the hard-hit manufacturing sector.

Wage growth for permanent employees, an indicator tracked by the Bank of Canada as a gage of inflation, slowed to 1.3 percent year-on-year from 2 percent in June.

© 2017 Thomson/Reuters. All rights reserved.

 
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Record job losses in the public sector and scarce opportunities for youth led to unexpected weakness in the Canadian labor market in July, hinting at a sluggish start to the third quarter.
Canada,Jobs,Government,Workers
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2013-20-09
Friday, 09 Aug 2013 09:20 AM
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