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People wait in line for resume critique and career assessment sessions at the 2014 Spring National Job Fair and Training Expo in Toronto, in this file photo. (Aaron Harris/REUTERS)
People wait in line for resume critique and career assessment sessions at the 2014 Spring National Job Fair and Training Expo in Toronto, in this file photo. (Aaron Harris/REUTERS)

Private sector pummelled as Canada sheds 11,000 jobs in August Add to ...

Employment in Canada’s private sector is at a standstill.

While monthly employment readings have seesawed through the year, one trend is clear: Private companies are in no mood to hire, having shed a record 111,800 jobs in August, according to Statistics Canada.

Month-to-month measures have been volatile but the longer-term view shows full-time and private positions have barely budged in a year, while eight in 10 new jobs have been part-time.

The numbers seem at odds with other indicators that show strengthening exports, solid housing starts and retail sales that have climbed for six consecutive months. But the tepid hiring reflects caution among employers grappling with competitive pressures, uneven global demand and rapid shifts in many of their business models.

Greg Wight, for one, the chief executive officer of Algoma Central Corp., the largest operator of dry-bulk vessels on the Great Lakes-St. Lawrence Seaway, has seen fairly robust demand this year.

Activity is strong in shipping iron ore for the steel industry, while his vessels are also moving more grain and salt. He’s optimistic, but said volatility in demand is causing uncertainty.

Algoma has invested millions of dollars in purchasing ships that will boost productivity by going faster and carrying more cargo. But that doesn’t mean he’s planning a hiring spree. If anything, “we can operate with fewer crew members because of technological improvements,” he said.

In recent years, the services sector has been the main driver of jobs growth. Now, though, many of the sectors benefiting from a pickup in demand, such as manufacturing and information technology, may not need a big influx of workers as they ramp up output, said Randall Bartlett, senior economist at Toronto-Dominion Bank.

Employment numbers have been turbulent all year, with job gains in one month followed by losses in the next. Smoothing out the monthly bumps, employers have added a paltry 10,400 jobs per month on average so far this year.

All told, the Canadian economy shed 11,000 jobs last month, while the jobless rate remained at 7 per cent as more people exited the labour force, Statistics Canada said Friday.

Private-sector hiring tumbled as the manufacturing, trade and professional services sectors cut jobs. The share of people working in manufacturing has ebbed to a record low this summer. The public sector added 14,000 jobs and self employment rose by 86,900, a record gain.

The outsized readings on private-sector losses and self-employment gains raised eyebrows. Bank of Nova Scotia economists Derek Holt and Dov Zigler called the numbers “very fishy” and advised clients to be “very careful” in drawing conclusions from the monthly data.

Skepticism over the data comes after the agency was forced to correct its July jobs numbers. That month saw a gain of 41,700 positions rather than the 200 jobs it had originally reported, a mistake attributed to an incomplete understanding of changes that occurred in the redesign of its survey.

The broader picture shows employment levels in the private sector “has been relatively flat since the fall of 2013,” Statistics Canada observed.

In the past few months, companies including Bombardier Inc., Rogers Communications and Transcontinental have announced layoffs, along with multinational firms, such as Cisco Systems and Microsoft. At the same time, restraint remains in the public sector with the federal government continuing to trim payrolls.

The Bank of Canada has recently flagged the weak performance in the jobs market, saying the prevalence of part-time positions is a “symptom of slack” in the labour market. In its interest-rate statement this week, the central bank said that, although the country’s export sectors “appear to be turning the corner,” this pickup will need to be sustained before it translates into more hiring.

Young people in particular have seen little improvement on the employment front. The average jobless rates for students this summer was little changed from the previous year, while their average number of hours worked fell to 23.5 hours a week from 23.7 hours in the previous summer.

The country's participation rate fell to 66 per cent, the lowest since 2001, as 20,800 people left the labour force.

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