Canada jobless report weaker than expected, energy sector remains a drag on full-time workers

The Canadian employment report for the month of June remained weaker than what market had anticipated, with the key energy sector remaining a drag on full-time workers. However, most forecasters had expected job growth to resume last month after a small loss in June, which would have continued the recent see-saw labor pattern.

The unexpected job losses sent the unemployment rate up to 6.9 percent from 6.8 percent in June, data released by Statistics Canada in its monthly labor report showed Friday. Further, the country lost a surprising 31,200 jobs in July, data showed.

Moreover, employers eliminated 71,400 full-time positions, the second consecutive month of full-time declines, but 40,200 part-time jobs were created. Meanwhile, the participation rate fell to its lowest level since late 1999, as more people either stopped actively searching for work or stopped working altogether. Over the first seven months of the year, employers created 12,400 positions, representing the weakest job creation since the Great Recession.

Although the number of hours worked rose slightly, growth in wages slowed, suggesting demand for labor has weakened. Employment among younger workers fell by 28,000 positions and the services-producing sector took a hit.

Further, across the country, the public sector shed 42,000 positions, with about half the losses due to a drop in public administration employment at the municipal and regional level. Ontario, the country’s most populous province, saw 36,100 positions vanish in July with losses in educational services, public administration, construction, finance, insurance and real estate.

Meanwhile, In the US, employers exceeded expectations and added 255,000 new jobs, a sharp contrast to Canada’s labor market woes. The jobs report along with weak trade data sent the loonie plummeting 0.83 of a cent (US) to close at 75.96 cents.