A rush of new part-time jobs offset a drop in full-time work last month to help the economy post a net gain of 54,100 positions and drop the unemployment rate to a four-decade low.

The July jobless rate was 5.8%, down from 6% the previous month, Statistics Canada said Friday in its latest labour force survey.

However, the details of the report revealed weaker data underneath the bigger-picture improvements.

The country gained 82,000 less desirable, part-time positions last month—and it lost 28,000 full-time jobs.

A closer look at the numbers also showed the public sector made the biggest contribution to the July increase with 49,600 new jobs, while the private sector added 5,200 positions.

The agency said average hourly wage growth, which is closely monitored by the Bank of Canada, continued its gradual slide last month to 3.2% after expanding 3.6% in June and 3.9% in May.

The total number of hours worked in July expanded 1.3%, a slightly slower pace than the June reading of 1.4%.

“In the wacky world of Canada’s monthly employment numbers, July came up with another head scratcher, with some big headlines but some disappointments in the fine print,” CIBC chief economist Avery Shenfeld wrote Friday in a research note to clients.

Shenfeld added that there are “lots of reasons to question just how good the data really are here.”

Brian DePratto, senior economist at TD, said the results “could have been better, [but] could have been worse,” in his Friday commentary. “A solid headline number masked less than optimal details: all part-time hiring, and by and large public sector, driven by universities. On the plus side, the number of unemployed fell and more Canadians were drawn to the labour force – both signs of a healthy economy,” he wrote.

On the Bank of Canada, he said, “We’re still a ways away from the next Bank of Canada rate decision, but with this first glimpse of third quarter activity kicking things off more or less on the right foot, the conditions remain right for further rate increases.”

For Shenfeld, the report contained a “good” set of numbers that will keep markets guessing whether the BoC will introduce its next interest rate hike in September or October. CIBC predicts the next rate increase will land in October.

This matches Shenfeld’s call in late July, when data showed the economy grew 0.5% in May. He also forecast that the loonie would be weaker toward year-end.


Compared with a year earlier, overall employment was up 1.3% following the addition of 245,900 jobs for an increase driven by 210,500 new full-time positions.

By industry, the services sector saw the biggest gains last month with a combined net increase of 90,500 jobs, which was led by 36,500 new positions in education and 30,700 in health care and social assistance.

Overall, the goods-producing sector lost 36,500 jobs in July, with a notable loss of 18,400 positions in manufacturing and a drop of 12,300 in construction.

Provincial stats

Across the provinces, Ontario gained 60,600 jobs—all in part-time work—and the unemployment rate dropped 0.5 percentage points to 5.4% for its lowest reading since July 2000.

Looked at together, both the labour force survey and Survey of Employment, Payrolls and Hours suggest “employment in the country’s largest province is rising at the fastest pace in years,” said National Bank’s Krishen Rangasamy in a Friday report.

“Ontario’s share of paid employment in Canada [is] at roughly 39% in 2018, an increase compared to last year. Employers seem reluctant to part with their now more expensive workers perhaps due to reported labour shortages, although the persistence of strong sales and profits could also explain the resilience of employment,” he wrote.

Employment also rose in British Columbia and Newfoundland and Labrador, while Saskatchewan and Manitoba lost jobs last month.

More women between the ages of 25 and 54 years old were working in July as the category saw a gain of 30,300 jobs.

The youth unemployment rate—representing workers aged 15 to 24 years old—fell to 11.1%, down from 11.7% in June. The report said the main cause of the drop was due to the fact fewer young people were looking for work.

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