Jobless rate drops to 7.2%

Canada's unemployment rate dipped to 7.2 per cent in July as the economy added 7,100 new jobs, Statistics Canada reported Friday.
Canada's unemployment rate dipped to 7.2 per cent in July as the economy added 7,100 new jobs, Statistics Canada reported Friday.

It was the fourth straight month of job growth, although the gain was weaker than the 15,000 to 20,000 new jobs economists had been expecting.

   July unemployment rate

 Region  Rate    Change from June (percentage points)
 Canada  7.2%  -0.2%
 N.L.  11.9%  -0.4%
 P.E.I.  11.6%  -0.4%
 N.S.  9.5% +0.8% 
 N.B.  10.1%  +0.5%
 Que.  7.2%  -0.7%
 Ont.  7.5%  -0.2%
 Man.  5.7%  +0.2%
 Sask.  4.9%  --
 Alta.  5.5%  -0.1%
 B.C.  7.3% --
  Source: Statistics Canada 

Statistics Canada said the unemployment rate dipped mainly because almost 29,000 people left the labour force and were no longer actively looking for work.

While overall employment gains disappointed, analysts were more upbeat about some of the details in the jobs report. 

For one thing, the number of full-time jobs jumped by 25,500, more than offsetting the decline in part-time workers.  

Economists also cited the robust job gains seen in the private sector, where employers added 94,500 positions. The public sector shrank by 71,500 jobs.

"Not exactly what the doctor ordered, but not bad," BMO Capital Markets deputy chief economist Doug Porter wrote in a morning commentary. 

"The headline jobs tally was a touch light, but the details of the report are unambiguously healthier — the strong gain in full-time jobs, the pop in private sector employment, and the fact that the overall number was skewed lower by yet another July drop in education employment."

The construction, transportation and warehousing, and retail and wholesale sectors led the gains. There were 31,000 more construction jobs, 28,000 more transportation and warehousing jobs and 28,000 more retail and wholesale jobs in June. Even manufacturing posted a gain.

On the flip side, there were fewer jobs in health-care and social assistance, while the number of public administration and management jobs was also down.

Natural resources also had an off month and there were fewer jobs in agriculture.

"Just looking at the industry breakdown would suggest the cyclical components of the economy are on fire, while the public sector is pulling back — which hardly jibes with the anecdotal evidence, or any other evidence for that matter," Porter wrote.

Alberta and Newfoundland and Labrador posted job gains in July, while Ontario saw losses.

Employment was down 22,400 jobs in Ontario following a slight increase in June. Despite the drop, employment growth over the last year stands at 1.6 per cent, which is similar to the national growth rate.

The rest of the provinces were largely unchanged. Quebec's jobless rate fell, mostly because of fewer people entering the workforce.

With files from The Canadian Press