More than 10,000 new jobs were filled in Canada in July, and according to Dominion Lending Centres
chief economist Dr. Sherry Cooper, this indicates a shift into a less intense gear for a segment recently running on overdrive. The July gains contributed to a slight decline of 0.2% in the national unemployment level, down to 6.3% – representing the best rate in nearly nine years.
Notable month-over-month decreases in unemployment levels were observed in New Brunswick, Nova Scotia
and Manitoba. Meanwhile, joblessness intensified in Newfoundland, British Columbia and Alberta, although that province appeared to still be on the road to recovery with a 1.5% year-over-year increase in payrolls in July.
A related development was the significant increase in hours worked over the past year, which Cooper said is “a reliable indicator of rising incomes, as employment shifted from part-time to full-time jobs.” Despite this, however, wage levels saw only a modest 1.3% year-over-year growth – unchanged from June 2017, “but still better than the record-low gain of 0.7% in April,” Cooper said.
She added that the economic strength demonstrated by increased employment has been reflected in the generous increases enjoyed by the Canadian dollar recently.
“In recent weeks, the Canadian dollar has risen sharply, and borrowing rates have increased significantly,” Cooper said. “Canada’s economy is now the strongest in the G7, posting growth of 3.7% in the first quarter, likely followed by a whopping 4% gain in the second quarter.”
That economic strength was a major impetus behind the Bank of Canada’s decision to raise rates, she added, and it could inspire further rate increases later this year.
“Canada’s economy remains strong, causing the Bank of Canada to raise interest rates [in July] for the first time in seven years,” Cooper said, “and we believe that another rate hike is likely later this year, despite still muted inflation.”