August 6, 2010

Canadian employment: a pause after an Big swings in the Canadian labour market in July
unsustainable run-up Full-time and part-time jobs

160 Monthly change (thousands)

Latest (monthly change): -9.3k (Actual); +12.5k (expected) 140 Part-time: +129.7K
Previous: +93.2k 120
100
80
FACTS: Total employment decreased 9.3K in July following 60
a rise of 93.2K in June. Significant losses were observed in 40
full-time employment (-139.0K) while part-time jobs 20
0
(+129.7K) posted a strong increase. Despite the weak -20
headline number, the goods-producing sector increased -40
-60
strongly in July (+42.0K) following two consecutive monthly -80
declines. The largest gains came from manufacturing -100
-120
(+28.5K) while utilities (+0.7K) and construction (+2.8K) -140 Full-time: -139K
lagged. Service producing sector declined 51.3K with the -160
2003 2004 2005 2006 2007 2008 2009 2010
largest losses coming from educational services (-65.3K)
and finance, insurance, real estate & leasing (-29.8K). On Goods almost offset services in July
the other hand, public administration (+18.7K) and health Monthly employment change in goods and services +42K jobs in goods-
producting sector in
care & social assistance (+13.7) were the top performers. At July…
120 %, m/m
the provincial level, five of ten provinces showed decreased 100
in employment with Quebec (-20.9K) and Ontario (-15.0K) 80
showing the largest losses. The unemployment rate 60
increased 0.1 percentage points to 8.0%. Total hours 40

worked increased 0.3% (SA) during the month and the 20

0
average hourly wage was up 0.6% m/m (SA).
-20
-40
OPINION: The Canadian labour market took a pause in -60
July, a purely natural phenomenon after having created a -80
whopping 226.6K jobs in the previous three months. Large -100 …offset by a 51.3K
loss in services
swings were observed in July with a loss of 139K full-time -120
-140
jobs and a gain of 130K part-time jobs. Educational services 2008M01 2008M07 2009M01 2009M07 2010M01 2010M07
accounted for half of job losses with a decline of 65.3K. On
a positive note, the lost of 51.3K jobs in overall services was Strong start for wage bill in Q3
almost offset by strong gains in the goods-production sector. Canadian wage bill growth (total hours worked times average hourly wage rate)

Manufacturing, a highly cyclical industry, created 28.5K jobs 12 % q/q ann.

in July, its biggest increase in 26 months, i.e. before the 10
+ 3.2% with only one
month in the quarter
recession began. With an important decline in full-time jobs,
8
the wage bill could have declined in July but this is not the
6
case. Hours worked increased 0.3% while average hourly
4
wage rate was up 0.6% on a seasonally adjusted basis.
Thus, with only one month completed in the quarter, the 2

wage bill is already up by an impressive 3.2% q/q 0

annualized, a good sign for consumption going forward. -2

Despite the slight negative headline, this morning’s report is -4

in no way a sign of weakness of the Canadian labour -6
market. Yanick Desnoyers/Matthieu Arseneau -8
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ECONOMICS AND STRATEGY GROUP – 514.879.2529

Stéfane Marion, Chief Economist and Strategist
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