The Canadian economy shed 11,000 jobs in August but the unemployment rate stayed the same at seven per cent, Statistics Canada reported Friday.

The figure was much less than economists were expecting. The consensus was that the economy would eke out a slight gain of about 10,000 jobs.


Canada lost 11,000 jobs in August, according to Statistics Canada data released Friday.

The data agency said fewer youths and women in their core working years had jobs, but employment increased among men in their core working years — 25 to 54.

Over all classes of workers, however, there was a decrease in both full-time and part-time work. Ontario and Alberta made up most of the losses, with all other provinces largely unchanged.

The participation rate dropped to its lowest level in more than 13 years, at 66 per cent.

Huge drop in private sector jobs

Although mildly negative, the monthly jobs number wasn't what drew the most attention. Instead, economists noted a large drop of 111,000 private-sector workers — a monthly record.

Ordinarily, a huge drop like that would weigh heavily on the headline jobs number. But it was offset by an almost equally large gain of 87,000 self-employed workers.

"When a large increase in self-employment coincides with a large drop in positions paid by an employer, it begs the question of whether Canadians are becoming self-employed by choice or because jobs are not available," United Steelworkers economist Erin Weir said.

"One also wonders how many survey respondents are simply more comfortable reporting themselves as self-employed rather than unemployed."

But the data agency saying there's no evidence in the data that the two large numbers are related. "That's an interesting hypothesis," Statistics Canada analyst Andrew Fields said in an interview with CBC. "But we don't know and we wouldn't necessarily be able to find out from this survey."

The agency's report simply shows whether someone was employed in the private-sector one month, and self-employed the next, he says. "That shift would that shift would show in the numbers, but we wouldn't get a reason," Fields said.

Other economists were also scratching their heads, especially after the data agency last month made headlines for initially reporting the wrong jobs number.

"The rise in the number of self-employed and the 111,800 drop in private payrolls are both monthly records in figures stretching back to the survey’s inception in 1976," Scotiabank economists Dov Ziegler and Derek Holt said in a note.

"That’s statistically possible I suppose, but it looks very fishy to me."

Citibank economist Dana Patterson called the private-sector job losses a "shocking tumble," but added that it's in keeping with a generally bleak employment picture this year.

"The sickly print follows the pattern of most of this year as businesses have been reluctant to hire," Patterson said.