OTTAWA Aug 15 Canada created 41,700 jobs in
July, considerably more than expected, and the unemployment rate
dropped to 7.0 percent from 7.1 percent in June, according to
revised data Friday from Statistics Canada.
Market analysts had forecast a gain of 20,000 jobs.
Statscan initially reported a week ago that just 200 new
positions were created in July, but withdrew the data, citing
Even though the numbers were better than predicted, they
still reflect a sluggish Canadian economy that has yet to
benefit fully from a recovery in the United States, its main
The year-over-year employment gain was only 156,800 jobs, or
0.9 percent, while the six-month moving average for employment
growth grew to 10,900 in July from 8,800 in June.
The labor force participation rate remained at 66.1 percent,
the lowest since the 66.0 percent seen in November 2001.
Paul Ferley, assistant chief economist at Royal Bank of
Canada, said the July data suggested "a totally different
picture in terms of the employment conditions in July" compared
to the initial release.
"Year to date, the gains in employment are still fairly
modest. Going forward, hopefully we'll see sustained increases,
but at the moment certainly these revised July numbers, it's
showing a more encouraging picture, though we're not out of the
woods yet," he said.
Statscan said 59,900 part-time positions were created in
July, while full-time jobs dropped by 18,100. Due to a human
data processing error, the agency initially reported 60,000 new
part-time jobs and a loss of 59,700 full-time positions.
In a statement, Statscan's chief statistician Wayne Smith
described the July mistake as "an isolated incident" and said he
had full confidence in the integrity of the overall labor force
Separately, Statscan reported the value of Canadian factory
sales grew 0.6 percent in June from May, pushed up by the
chemical, petroleum and coal product industries.
The increase - the fifth in six months - was greater than
the 0.4 percent advance predicted by analysts. Statscan revised
May's month-on-month gain to 1.7 percent from 1.6 percent.
Camilla Sutton, chief currency strategist at Scotiabank,
said the combined sets of data were promising.
"Job gains are good, and an unemployment rate that is
falling with a stable participation rate is also encouraging,"
she told Reuters.
"You combine in manufacturing sales which was not only
stronger than expected but the second upside surprise and last
month's was also revised slightly higher. So that too is fairly
encouraging in terms of what's transpired in the domestic
The Bank of Canada has kept its key interest rate at a
near-record low 1.0 percent since September 2010 and says it
will not contemplate a hike until the economy shows signs of a
(Additional reporting by Leah Schnurr and Allison Martell in
Toronto; Editing by Bernadette Baum)