Job losses up in Canada, U.S.
Harper says recovery remains fragile, rules out renewed stimulus
Prime Minister Stephen Harper said Friday he's not considering a second round of government economic stimulus — at least not for now — after Statistics Canada reported the country lost 139,000 full-time jobs in July.
Harper, emerging from Rideau Hall after a minor cabinet shuffle, said he does not believe the Canadian economy is slipping back into recession.
"The job numbers today indicate what we've been saying: the global recovery remains fragile," he said.
"It's not going to be all smooth. The trend lines have generally been good. At the moment, I certainly don't see any indication of a second stimulus."
The loss of those full-time positions was softened somewhat by the gain of 129,700 part-time jobs for a net loss of 9,300, which pushed the unemployment rate up by 0.1 percentage points, to eight per cent.
The drop was the first fall in employment this year.
Canadian Auto Workers president Ken Lewenza said the numbers show the country is still recovering from the recession.
He called for an extension of employment insurance stimulus measures, including an extra five weeks of benefits for all claimants and a task force to look at the future of good full-time jobs in Canada.
The Canadian number represented the first decline in seven months after the number of jobs rose by 93,200 in June and by a record 108,700 in April.
Not a fundamental shift
"The first drop in employment since December does not signal a fundamental shift in the economy," Bank of Montreal economist Douglas Porter said.
"Overall, this report appears to be a very mild payback for previously amazing strength, and the bigger picture is that almost all of the recession's job losses have been reversed in the very short space of a year."
Quebec had the biggest losses, at 21,000, with Ontario following with 15,000. British Columbia gained 16,000, while Alberta added 9,000.
The goods-producing sector gained 42,000 jobs, 29,000 of them in manufacturing. The services industry shed 30,000.
The employment picture was worse in the U.S.
The world's largest economy lost 131,000 jobs in July, keeping the American unemployment rate at 9.5 per cent, the Labour Department reported Friday. The rate was unchanged in part because of a drop in the number of people looking for work.
The Labour Department reported public service jobs fell by 202,000, while private employment rose by 71,000.
Much of the public sector decline was driven by a 143,000 fall in temporary jobs that had been created by the American census taking, which has now ended.
Alistair Bentley, an economist with TD Economics, suggested in a commentary that the prospects of bringing U.S. unemployment down soon are "not promising."
As employment improves, he said, more people will start searching for work again and it will take the creation of more than 121,000 jobs a month to lower the unemployment rate.
Sal Guatieri, an economist at BMO Capital Markets, suggested the report could lead Washington to announce more spending programs.
"Anemic job growth and still-high unemployment could pressure Fed policy makers to undertake further stimulus in the months ahead," he said.
Markets move lower
North American markets initially moved lower after the release of the jobs data, but later recovered.
Toronto's S&P/TSX composite index was up 15 points, or 0.1 per cent, to 11,790 in the last hour of trading.
In New York, the Dow Jones industrial average was down 74 points, or 0.7 per cent, to 10,601. The Nasdaq composite index lost 14 points, or 0.6 per cent, to 2,279, while the S&P 500 index was down nine points, or 0.8 per cent, to 1,117.
The Canadian dollar fell 1.24 cents, to 97.09 cents US.
With files from The Canadian Press