More Bad News For Canadian Economy

August 8, 2008

Canada lost 55.2 thousand jobs in July, the most since February 1991.  Jobs had also dropped modestly in June.  Average job growth during the first seven months of 2008 of 10K per month was only a third as much as their full-2007 pace.  Private employees plunged 95.3K in July to record an on-year increase of just 0.5%.  The loss of jobs last month was concentrated in manufacturing (-32.3K and off 4.3% y/y), business support services (-30.1K and -5.4% y/y), and retail and wholesale trade (-19.3K and -1.2% y/y).  Full-time jobs fell just 7.1K from June but advanced by a weak 0.9% y/y.  Average hourly earnings increased 4.0% y/y, down from 4.4% in June and 4.8% in May.  Earnings have grown at least 4.0% y/y for the past 12 months. The only bright spot in the labor report was a downtick of the unemployment rate back to May’s 6.1% from 6.2% in June, but that drop reflected a 74.1K decrease in the labor force.  Another sign of declining worker confidence was a 10.6K increase in self-employment.  When people cannot find someone to hire them, they often attempt to set up a business on their own, but that more often than not is a form of underemployment.  Like Europe, Japan, and Australia, Canadian growth has suffered more than anticipated from the weakness of the U.S. economy and the global financial market disturbance.

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