7 September 2007

Employment Report from the Canadian Chamber of Commerce

The following is the report on employment issued today by the Canadian Chamber of Commerce.

Employment in Canada rose a solid 23,300 in August, surpassing market expectations. An estimated 6,500 full-time positions and 16,800 part-time jobs were created in August. The unemployment rate remained steady at a 33-year low of 6.0%.

Most of the net new jobs were created in the goods-producing sector (+20,400) with construction leading the way (+15,500). Manufacturing posted a small decline (-3,200). The service sector also posted a small increase (+2,900) as large gains in education (+32,800); business, building and other support services (+14,700); and health care (+14,500) were offset by declines in other areas including professional, scientific and technical services (-14,400); transportation and warehousing (-31,000) and information, culture and recreation (-10,600).

On a regional basis, 7 of 10 provinces reported a gain in employment in August. The biggest gains were in Ontario (+9,300) and British Columbia (+8,300).

Canada's labour market remains healthy and tight. Indeed, an estimated 232,000 net new jobs have been created in Canada thus far in 2007, 84% of which have been full-time positions. A key element contained in today's employment report is average hourly wages, which continue to trend upwards, posting a 4.0% year-over-year increase in August. In no doubt, this is of concern to the Bank of Canada. This, coupled with the fact that Canada's economy is operating above its capacity limits, suggests that when Canada's central bank moves on interest rates, it will be to hike its key policy rate.