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Canada posts surprise gain in employment
 
 
September 4, 2009 
 
A Service Canada location in Toronto. Statistics Canada said Friday 
that Canada created 27,000 jobs in August, but due to a rise in job 
seekers, the employment rate rose 0.1% to 8.7%
 

OTTAWA -- Canada posted a surprising gain in employment in August as 
the economy showed signs that it was beginning to pull out of a 
recession.

Statistics Canada said Friday that 27,100 positions were added during 
the month, compared with 44,500 losses in July. The unemployment rate 
edged up to 8.7% in August from 8.6% the previous month.

The gains were led by part-time and private-sector employment, the 
federal agency said. There were 30,600 part-time jobs added in August, 
while 3,500 full-time positions were lost. Hardest hit was the 
manufacturing sector, which shed another 17,300 in August. The biggest 
gains were in the retail and wholesale trade, up 21,200, and finance 
and real estate, up 17,500.

Six provinces saw employment rise, with the biggest increases in 
Ontario, British Columbia and Quebec. Alberta lost the most jobs in 
August.

�Since employment peaked in October 2008, total employment has fallen 
by 387,000 (down 2.3%),�the agency said. �The trend in employment, 
however, has changed recently. Over the last five months, employment 
has fallen by 31,000, a much smaller decline than the 357,000 observed 
during the five months following October 2008.�

Most economists had expected the economy to lose jobs in August, with 
the consensus being about 15,000 fewer positions. They also expected 
the unemployment rate to rise to 8.8%.

�This report may not quite carry the good housekeeping seal of approval 
for the recovery, but it certainly is another big step in the right 
direction,� said Douglas Porter, deputy chief economist at BMO Capital 
Markets.

�While we can quibble about the details, the broader picture here is 
that the labour market is stabilizing, and apparently much faster than 
in the U.S.� (The U.S. Labor Department said Friday that 216,000 jobs 
were lost in August, although that was less than analysts had 
expected.)

Charmaine Buskas, senior economics strategist at TD Securities, said 
�the fact that the (Canadian) unemployment rate continues to rise has a 
bit of a mixed messages, as the initial interpretation is negative, but 
suggests that workers are slowly becoming more encouraged by better 
prospects in the job market.�

�Ultimately, this report, while positive, is not going to have much 
impact on the Bank of Canada. It has already committed to keep rates on 
hold, and one month of good employment numbers is unlikely to sway the 
decision.�

Avery Shenfeld, chief economist at CIBC World Markets, said: �Half a 
loaf, or in this case, half a job, is better than none, so an increase 
in Canadian employment driven by part-time work is still an encouraging 
signpost of an economic recovery now underway.�

The employment report follows some mixed signals of an economic 
recovery in Canada.

On Thursday, the Organization for Economic Co-operation and Development 
said Canada�s economy will contract 2% in the third quarter of 2009 
before edging up 0.4% in the final three months of the year.

That�s in contrast to forecasts by the Bank of Canada, which expects 
the country�s gross domestic product to grow 1.3% in the third quarter 
of this year, followed by a 3% gain in the final three months of 2009. 
The central bank also forecast the economy will contract 2.3% overall 
this year and grow 3% in 2010.

Last week, Statistics Canada reported GDP increased 0.1% in June, even 
as the second quarter declined overall by 3.4%.

The outlook by OECD, a Paris-based group of 30 industrialized nations, 
shows Canada�s recovery lagging along with the U.K., which is expected 
to decline 1% in the third quarter and be flat in the final quarter, 
and Italy, which is forecast to shrink 1.1% and grow 0.4%, 
respectively.