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Labour Force Survey Analysis –  July 2016

Loss of temporary Census workers contributes to lower employment in July

Canadian Labour Market

The Canadian jobs market continued to sputter in July, posting a second straight decline. The loss of 31,200 jobs represents a decrease of 0.2 per cent compared to June and adds to what was already shaping up to be another lacklustre year for job creation in Canada. Through seven months, employment across Canada is just 0.6 per cent higher than it was over the same period in 2015.

July's losses were enough to drive the national unemployment rate up slightly, to hit 6.9 per cent. It is worth noting that the main reason the unemployment rate is staying relatively low is because fewer and fewer Canadians are actively looking for work. To be counted as unemployed, an individual must be participating in the labour force - either holding a job or actively looking for work. The number of unemployed people looking for work is dropping, pushing Canada's labour force participation rate to its lowest level in more than 16 years.

Adding to the concerns in July is the fact that there was a sharp decline in full-time jobs. In total, there were 71,400 fewer full-time positions last month, offset in part by the addition of 40,200 part-time workers. 

Most provinces saw employment stay flat or decline in July. By far the largest drop, however, was in Ontario, where 36,100 job were lost - a decrease of 0.5 per cent compared to June. There had been a relatively steady increase in employment in Ontario through 2016 so far, but July's losses return overall employment levels in the province back to December 2015 levels.

The only two provinces where employment rose in July were New Brunswick and BC. The 12,100 jobs added in BC represented an increase of 0.5 per cent over June and solidified that province's position as Canada's jobs growth leader in 2016. Through seven months, employment in BC is up 3.3 per cent compared to the same period last year. The next best province, Ontario, has posted a 1.1 per cent gain over that time.

At the industry level, the main story in July was a sharp drop in the number of public sector jobs. In May there was a temporary spike in public sector employment tied to the administration and collection of the 2016 Census. With the collection phase of the Census complete, public sector employment returned to pre-census levels, resulting in a decrease of 24,200 total jobs. There were also job losses in wholesale and retail trade, as well as cultural and educational services.
Offsetting those losses to some degree was a surge in health care and social services employment, with the addition of 28,300 jobs last month.

Manufacturing Sector Labour Market

After a disappointing June, manufacturing sector employment rebounded somewhat in July, adding 5,600 net new jobs, bringing total employment to just under 1.69 million. For the year to date, manufacturing employment is tracking slightly below 2015 levels.

July's gains were heavily concentrated in Ontario, which added 13,000 new manufacturing jobs - a healthy increase of 1.7 per cent over June. At 757,400 workers, manufacturing employment in Ontario is at its highest level since March 2014.

It was also a good month for manufacturing employment in Manitoba, which added 1,100 net new jobs - a 1.8 per cent increase. There were also smaller gains in Quebec, New Brunswick and PEI.

Meanwhile, June's spike in manufacturing jobs in Alberta proved fleeting as the province gave back those gains and then some in July. Alberta lost 6,000 manufacturing jobs last month. From January through July, manufacturing employment is down 16.5 per cent compared to the same period in 2015.

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