Jobless rate tops 8.1% in August

Despite the creation of nearly 36,000 new jobs, Canada’s unemployment rate rose to 8.1% in August, according to StatsCan. The net gain of 36,000 jobs may look good at first glance, but it includes the return of 68,000 education workers.

The rise in unemployment stems from an increase in the number of people actually looking for work. An additional 53,500 joined the labour force in August.

The official unemployment rate had reached a post-recession low of 7.9% in June, but in the past two months, jobs gains have averaged just 13,000 positions.

Quebec posted the best employment gains, with 19,000 new positions, but the provincial unemployment rate remained at 8.2%. The province has seen employment growth of 3% since July 2009, compared to the national average of 2.6%.

Saskatchewan’s unemployment rate fell 0.3 percentage points to 4.8%, the lowest in the country.

The largest drop in unemployment came in Newfoundland, where the rate fell 1 full percentage point, but is still 14.0%. Newfoundland has seen the fastest rate of employment growth since July 2009, at 5.0%.

“Gazing through the monthly bumps in the headline number, Canada’s job machine continues to make headway,” wrote Derek Burleton, vice-president and deputy chief economist, TD Bank Financial Group.

It usually takes between six and nine quarters for employment levels to recover from a recession, he says. The August report from StatsCan indicates that all of the jobs lost in the recession — about 417,000 — have now been recovered in just four quarters.

That spurt of jobs growth could leave little fuel for further employment growth, however, and Burleton predicts only modest increases of between 5,000 and 10,000 new jobs for the remaining months of this year and into 2011.

“In this environment, the jobless rate will be hard pressed to break below 8% on a sustained basis even if growth in the labour force cools off in tandem, as we anticipate,” he writes.

(09/10/10)