(Adds reaction from finance minister, survey on hiring
By David Ljunggren
OTTAWA Aug 8 Canada's economy created a net 200
jobs in July, far fewer than analysts had expected, while labor
force participation fell to a fresh 13-year low, the country's
statistical agency reported on Friday.
The data confirmed the general sluggishness that has marked
Canada's labor market in recent quarters and reinforced
expectations the Bank of Canada is unlikely to raise interest
rates any time soon.
Part-time employment rose by 60,000 jobs last month, while
full-time jobs fell by 59,700, according to Statistics Canada.
Analysts had forecast a net gain of 20,000 jobs after the loss
of 9,400 positions in June.
"It highlights a very disappointing pace of job gains in
Canada," said Camilla Sutton, Scotiabank's chief currency
strategist, who described the drop in full-time employment as
Canada's unemployment rate dipped to 7.0 percent from 7.1
percent because fewer people were looking for work. The labor
force participation rate fell to 65.9 percent, the lowest level
since October 2001.
The year-over-year employment gain was only 115,300 jobs, or
0.7 percent, while the six-month moving average for employment
growth dropped to 3,900 from 8,800 in June.
The Canadian dollar hit a session low of C$1.0965
to the U.S. dollar, or U.S. 91.20 cents, shortly after the
release of the data, down from Thursday's close of C$1.0921, or
91.57 U.S. cents.
Analysts said the data provided breathing room for the Bank
of Canada, which pays close attention to the labor participation
rate and has said it will not consider a rate hike until it sees
lasting signs of an economic recovery and pick-up in employment.
Canada's central bank has kept its key interest rate at a
near-record low of 1.0 percent since September 2010.
"I think this keeps the Bank of Canada on the sidelines for
now, even though (economic) growth is looking quite a bit
stronger in the second quarter," said Robert Kavcic, senior
economist at Bank of Montreal.
"There is really no job growth anywhere outside of Alberta
The number of people working in construction dropped by
42,200 in July and employment in health care and social
assistance was down by 28,500, Statscan reported.
Those losses were partly offset by 11,500 additional jobs in
manufacturing and 32,100 more positions in educational services.
Finance Minister Joe Oliver said the monthly numbers were
"really volatile" and stressed what he said was Ottawa's good
job creation record.
"As we've said many times, the international financial
situation is fragile and we are intent on keeping the fiscal
strength necessary to sustain the growth that we have," he told
reporters in Toronto.
BMO Financial Group said on Friday it had carried out a
survey on hiring intentions that showed 55 percent of businesses
with at least 50 employees planned to expand the size of their
workforces this year.
Only 24 percent of businesses with fewer than 10 employees
had plans to hire more workers, it added.
(Additional reporting by Leah Schnurr, Allison Martell, Euan
Rocha and Alastair Sharp in Toronto; Editing by Meredith
Mazzilli and Paul Simao)