Canada not immune to global economic crisis: MacKay
Published Friday, August 10, 2012 8:38AM EDT
Last Updated Friday, August 10, 2012 10:29PM EDT
News that the Canadian economy shed 30,400 jobs in July shows that the country is vulnerable to the economic uncertainties in Europe and south of the border, said Defence Minister Peter MacKay.
Speaking to reporters in Halifax on Friday, MacKay said news of the rise in the jobless rate is concerning.
“I think the loss of these jobs does reflect some of the ongoing challenges that our economy faces vis-à-vis the U.S. and Europe,” said MacKay. “We’re not immune from those turbulent global economic trends.”
The latest labour force survey by Statistics Canada released on Friday shows a 1.8 per cent drop in part-time work, representing 51,600 jobs.
The drop in employment last month pushed the Canadian unemployment rate up by one-tenth of a point to 7.3 per cent.
However the loss was offset by more full-time employment created in July with 21,300 new jobs, representing a 1.4 per cent increase. Average wages are currently 3.6 per cent higher compared to a year ago.
Despite the rise in full-time work, economists were expecting more from the Canadian economy following two months of little change.
“This is definitely disappointing,” Andrew Gretzinger, a senior economist with Manulife Asset Management, told BNN on Friday. “We were looking for a modest 5,000, 6,000 increase in job numbers.”
Service-producing sectors led the decline in jobs.
According to Statistics Canada, employment losses in July were in wholesale and retail trade, professional, scientific and technical services, public administration, natural resources and manufacturing.
The job losses in those sectors were somewhat offset by gains in information, culture and recreation as well as in finance, insurance, real estate and leasing.
In July, employment declined in British Columbia, Manitoba, New Brunswick and in Newfoundland and Labrador. However, no province was hit harder than Quebec, which lost 28,700 jobs in July.
The job market was stronger in Prince Edward Island and in Ontario, which saw an increase of 10,600.
There was little change in the other provinces.
Statistics Canada said the country is still well ahead in terms of job creation for the year, with a cumulative increase of 124,600, although the vast majority of those gains came in two months -- March and April.
“Full time employment up by 21,000, that’s some decent news. There is maybe some change from being part-time to full-time that’s maybe why you see a little drop in the part-time,” said Gretzinger. “But again, it does suggest the Canadian economy, as we expected, has hit a soft patch this past summer.”
Gretzinger said Friday’s numbers do not bode well for the Canadian dollar, especially following a better than expected 163,000 job increase in the U.S. in July.
“We’ve been sort of lucky we’ve been doing better than our American counterparts, and that seems to now have gone by the wayside,” he said.
However one RBC senior economist says volatility in the Canadian job market is nothing new.
In an interview with CTV News Channel on Friday, Dawn Desjardins said despite July’s disappointing job numbers the Canadian labour market is still relatively healthy.
“If we look at trends in terms of employment growth over the course of 2012, we still see on average 18,000 jobs being created each month, which is not a bad result,” said Desjardins.
She said while the hiring place has slowed, surveys from the Bank of Canada show that businesses are optimistic in their ability to continue hiring.
“Canada has experienced quite a good recovery in the labour market compared to almost every other area of the globe,” said Desjardins. “Should we see a sharp fall in (job) gains in August, then it becomes a little more worrying.”
With files from The Canadian Press