Job growth trails expectations in July

OTTAWA — Canada's pace of employment growth took a step back last month.

There were 7,100 more people working in July, Statistics Canada said Friday, about half of the 15,000 economists were expecting.

The unemployment rate fell to 7.2 per cent in July from 7.4 per cent per cent in June as fewer people sought work.

That followed three-straight months of strong job gains — 28,400 in June, 22,300 in May and 58,300 in April.

In July, there were 94,500 more people working in the private sector, Statistics Canada said, but 71,500 fewer in the public sector. As well, there was a decline of 15,900 individuals who considered themselves self-employed.

Full-time employment was up by 25,500 while part-time workers fell by 18,400.

Douglas Porter, deputy chief economist with BMO Capital Markets, said the jobs data was "not exactly what the doctor ordered, but not bad," noting the gains in full-time and private-sector employment.

He also pointed out that the unemployment rate is the lowest it's been since late 2008, and there was a 1.2 per cent rise in hours worked last month.

"The one downbeat aspect of the release is that average hourly earnings faded further to just a 1.4 per cent (gain) year-over-year . . . falling further below recent headline inflation trends of more than three per cent," Porter added.

CIBC World Markets senior economist Peter Buchanan said the jobs data was "a fairly mixed report overall, with the details somewhat better than the headline."

He noted the rise in "paid employment jobs" overall versus people being in business for themselves, saying the former "tend to be of higher quality."

Employment growth in July was seen in the sectors of construction, transportation and warehousing, as well as retail and wholesale trade. There were fewer positions in health care and social assistance, educational services, business, building and other support services, natural resources and agriculture.

A few economists highlighted the effect that 30,000 fewer education jobs had on the overall numbers, with those reductions likely to be reversed when school's summer break is over.

"Typically, these jobs are recovered in August (or) September, meaning that this represents a one-off factor and, if excluded, employment gains were actually healthy at 37,000," said Dawn Desjardins, assistant chief economist for RBC Economics.

Looking across the provinces, Alberta, and Newfoundland and Labrador, saw job gains of 12,400 and 3,800, respectively, while there were 22,400 fewer workers in Ontario. Other provinces saw little change.