Canada added 34K new jobs, but concerns remain
Published Friday, September 7, 2012 8:39AM EDT
Last Updated Friday, September 7, 2012 12:25PM EDT
Canada’s economy created a surprising 34,300 jobs last month, but analysts suggest the number is hiding a level of uncertainty that is leaking back into the market.
An August job report released by Statistics Canada on Friday shows that while there was a healthy increase in job numbers, the boost came entirely from part-time positions.
The August report suggests that 46,700 new part-time positions were created, while 12,500 full-time positions actually disappeared.
BNN correspondent Michael Kane said the increase in overall jobs makes for a positive headline, but obscures an underlying uncertainty in the market.
“What economists will tell you they like to see is the creation of full-time jobs because that is a steady stream of household income. That shows the strengthening of the economy. So 12,500 full-time jobs lost is a disappointment,” Kane told CTV News Channel on Friday.
Economists were warning on Friday that Canada must prepare for possible fallout from economic uncertainty in the U.S., Europe and China.
It is unclear exactly how that instability will affect Canada, said Carlos Leitao, chief economist at Laurentian Bank Securities.
“The global environment is weakening. We have seen in the United States, Europe and even in China, the economic growth globally is slowing,” Leitao told CTV’s Power Play on Friday.
“In Canada … our exports are not done well over the last few months. That is a great source of weakness.”
Still, the announcement of 34,300 new positions comes as a welcome surprise to analysts who expected the economy to add about 10,000 jobs in August.
The employment rate remained unchanged at 7.3 per cent as the labour force grew at the same pace as employment gains.
The number was also a complete about-face from July’s numbers, when the economy shed 30,400 jobs, mostly part-time jobs from Quebec.
“Basically what we saw in August is an unwinding of what we saw in July,” RBC’s chief economist Craig Wright told CTV News Channel.
However, Wright agreed that the loss of full-time positions was more indicative of market confidence than the gains in part-time positions. He said the numbers suggests employers could be shifting from full- to part-time positions.
“Perhaps what we are seeing is firms working their employee’s shorter periods. And maybe that reflects the uncertainty and the weakness we have seen,” he said.
Bank of Canada governor Mark Carney stressed it was important to keep the numbers in perspective – specifically the 177,000 jobs created since last August, most of them full-time positions.
"Nobody is fully satisfied, obviously... but our job performance as a whole since the recession has been very strong," Carney told reporters from Calgary.
"All the jobs lost have been recovered, hundreds of thousands of additional jobs have been added, and most of those jobs, the vast majority of those jobs, have been private sector, they've been full-time jobs."