Economic growth in Canada remains a delicate issue, with new figures released this morning by Statistics Canada.
Canadian employment fell by 39,400 in July, significantly underperforming market expectations for a 10,000-unit increase
Unemployment rate edged up to 7.2% from 7.1% with the labour force falling by 14,200
Gains in goods-producing industries offset a large decline in service sector jobs, mainly in the public sector
The nation's number crunchers added that since January, the monthly change in employment has ranged from a drop of 54,500 to a surge of 95,000 with today's 39,400-unit drop another in the line of volatile numbers. July's drop may represent a further correction following May's outsized 95,000-unit surge.
Despite all the volatility in the monthly employment numbers, the unemployment rate has been in a range between 7% and 7.2% since last November.
"Having said that," according to experts at RBC Economics, "a 7.2% unemployment rate denotes that there remains some slack in the labour market which is also evident in the limited upward pressure being exerted on wages. While in the near term, reports on the economy will be dominated by the impact of the floods in Alberta and other one-off events, these factors will prove temporary as any weakening in June real GDP is (forecast) to be more than offset by stronger gains in the third quarter.
"On net," the bank concludes, "the economy is only likely to grow at a higher than potential rate on a consistent basis later this year at which time the pace of hiring is forecast to accelerate and the unemployment rate to break below 7.0%."
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