OTTAWA – The economy extended its winning streak in July, posting its eighth consecutive month of job growth while the unemployment rate dropped to its lowest point since the start of the financial crisis nearly nine years ago.
The unemployment rate fell 0.2 percentage points to 6.3 per cent, a level not seen since October 2008, as the number of people looking for work declined, Statistics Canada reported Friday.
The decrease came as the economy pumped out 10,900 net new jobs for the month. That followed staggering employment growth of 45,300 in June and 54,500 in May.
“We can forgive the economy for taking a bit of a breather on job gains in July, given how torrid the pace has been in the prior two months,” Avery Shenfeld, chief economist of CIBC Capital Markets, said in a note to clients.
The July data was fuelled by the addition of 35,100 full-time jobs, offset by the loss of 24,300 part-time positions.
Compared with a year ago, the number of jobs has increased by 388,0000, driven by a surge in 354,000 full-time positions.
However, the positive job figures were dampened by the latest numbers on Canada’s trade deficit, which ballooned to $3.6 billion in June from a shortfall of $1.4 billion the previous month.
Benjamin Reitzes, Canadian rates and macro strategist at BMO Capital Markets, said there were some one-time factors affecting the trade numbers.
“You had some very large declines in exports of metals, gold in particular,” he said, noting that oil prices have also fallen.
“That weighed very heavily on the number.”
Statistics Canada said exports fell 4.3 per cent to $46.5 billion. Shipments of metal and non-metallic mineral products plummeted by 14.9 per cent to $5.3 billion in June after a 12.4 per cent increase in May. Exports of energy products were down 9.2 per cent to $7.3 billion.
On the other side of the ledger, imports gained 0.3 per cent to $50.1 billion. Trade in metal ores, non-metallic minerals, aircraft and other transportation and parts hit record highs.
The latest economic data follows a decision by the Bank of Canada last month to raise its key interest rate target to 0.75 per cent, its first increase in almost seven years.
Reitzes said BMO continues to expect the central bank to wait until October before it raises the rate again, noting that there is still plenty of economic figures to come before the decision.
“It’s tough to see anything really derailing them outside of broadly weaker numbers for October,” he said. “They’ve been clear they want to take back the 50 basis points of easing they put in in 2015, so a hike in October would do that.”
Breaking down the jobs report, the wholesale and retail trade sector gained 22,000 jobs, information, culture and recreation added 18,000 and manufacturing saw an increase of 14,000. About 32,000 jobs in educational services were lost, mainly in Ontario and Alberta.
Regionally, employment in Ontario and Manitoba rose by 26,000 and 4,800, respectively. Alberta lost 14,000 jobs, Newfoundland and Labrador shed 5,300 positions and Prince Edward Island dropped by 1,000.