Canada’s Unemployment Rate Falls to 7.1% in August as Labour Market Continues Recovery
Canada’s labour market continued to recover over the summer months, as employment levels across the hardest-hit sectors rebounded better than expected in August.
According to data released by Statistics Canada on Friday, Canada’s economy added 90,000 more jobs in August, bringing the labour market just 0.8% below February 2020 levels. The latest gains follow a jobs increase of 231,000 in June and 90,2000 in July, as well as exceed the 68,200 forecast by economists polled by Bloomberg. This caused the unemployment rate to fall from 7.5% to 7.1% last month— the lowest since February of last year.
August’s gains were primarily concentrated in full-time work and in services-producing industries, particularly in the accommodation and food services sector. In fact, employment in this sector— which has been disproportionately impacted by lockdowns, has already returned to pre-pandemic levels in Manitoba and New Brunswick. Similarly, employment also increased in the information, culture, and recreation sector by 3.4%, as border restrictions for the fully vaccinated were lifted at the beginning of August.
The latest employment gains suggest that Canada’s labour market has rebounded strongly during the summer, as a high vaccine uptake allowed more businesses to reopen and hire previously furloughed employees. The strong jobs report also gives the Liberal government more momentum ahead of the September 20 election, after previously facing criticism that its generous pandemic emergency benefits may have been enticing some Canadians from seeking work.
Bank of Canada policy makers have previously argued that the country’s employment landscape would need to exceed pre-pandemic levels before a full recovery in the labour market is achieved, given that Canada’s population has grown since the beginning of the Covid-19 crisis.
Following the report, the Canadian dollar was little changed, at around $1.26 per US dollar at the time of writing.
Information for this briefing was found via Statistics Canada and Bloomberg. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
