Jobs numbers up, but rate hike not necessarily on way

Statistics Canada says the economy unexpectedly added 54,100 jobs last month and the unemployment rate dipped to equal a record low 5.8%, but analysts said the data were weaker than they appeared and played down talk of a rate hike next month.

The gain dwarfed the additional 17,000 jobs predicted by economists.

The healthy rise though was driven entire by part-time employment, which jumped by 82,000 jobs, while 28,000 full-time positions were shed.

Employment in the goods-producing sector fell by 36,500 jobs, mostly in manufacturing.

The Bank of Canada has raised rates four times over the last year as the economy strengthened and says further tightening will be data dependent. Its next fixed date for a rate announcement is on Sept 5.

The jobless rate had been 5.8 percent from February through May, the lowest since the current method of calculating unemployment was introduced in 1976, before edging up to 6.0 percent in June.

Market expectations of an interest rate hike in September, as reflected in the overnight index swaps market, rose to 27.1% from 23.3% before the release.

On a year-over-year basis, employment rose by 245,900 jobs, or 1.3%. The six-month average for employment rose to a gain of 20,800 compared to a loss of 2,800 jobs in June.

Moreover, average hourly wages in July, a figure watched closely by the central bank, rose by 3% from a year earlier. The year-over-year increase was the smallest since the 2.9% gain in December 2017.