Thu, Aug 18, 2022 @ 16:02 GMT
HomeContributorsFundamental AnalysisCanada Notches Up a Ninth Straight Month of Job Gains

Canada Notches Up a Ninth Straight Month of Job Gains

Canada saw another month of job gains, as 22.2k net positions were added in August. This was sufficient to bring the unemployment rate a tick lower, to 6.2%, close to pre-crisis lows.

The mix of jobs was somewhat unfavourable, as part-time work rose dramatically (+110.4k) and full-time positions declined by 88.1k. Both public sector (-8.3k) and the private sector (-2.1k) saw modest net employment declines, leaving self-employment (+32.7k) to fill the void.

Across industries, the goods-producers saw an overall decline (-13.7k), driven by manufacturing (-11.1k), and natural resources (-7.7k). It was a more positive story for services (+35.9k in aggregate) as net employment gains were recorded across most of the major industry groups.

Regionally, Ontario again drove the gain, adding 31.1k net positions, sufficient to reduce the provincial unemployment rate to 5.7%, a level last seen around the turn of the millennium. Employment was flat to slightly down across the remaining provinces.

The hours worked and wage rate figures were fairly encouraging: hours worked rose 2.2% year-on-year despite the climb in part-time work, helped by a drop recorded at this time last year (on a month-on-month basis, aggregate hours worked fell a tick). Similarly, the hourly wage rate ticked up 0.5%-pts to 1.8% year-on-year, continuing the acceleration seen last month.

Key Implications

August saw another month of job gains, and yet another month with mixed details. Part-time job growth, and self-employment drove the gains, resulting in a slight tick-back in aggregate hours worked. Indeed, the 88k drop in full-time work was enough to erase the better part of the previous three months’ gains in this category.

Still, details can’t be mixed if they’re all bad, and the tick up in the hourly wage rate to 1.8% year-on-year is encouraging to see, particularly when compared with the soft growth seen earlier in the year.

Overall, while the August job figures hardly paint a picture of robustness, this is a noisy series, and the trend this year remains a healthy one (let’s not forget the 105k full-time jobs added in February, or the 77k added in May). The further rise in wages is likely to provide more assurance to the Bank of Canada that overall price pressures are beginning to turn the corner, further supporting their decision to hike this week, and consistent with additional tightening before the year ends.

TD Bank Financial Group
TD Bank Financial Group
The information contained in this report has been prepared for the information of our customers by TD Bank Financial Group. The information has been drawn from sources believed to be reliable, but the accuracy or completeness of the information is not guaranteed, nor in providing it does TD Bank Financial Group assume any responsibility or liability.

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