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OTTAWA — Canada's labour market stabilized in August, defusing a bomb for the federal Conservatives as they gear up for an election campaign this week.
Canadian employers put 15,000 more people to work in August, maintaining the national unemployment rate at 6.1 per cent, Statistics Canada said yesterday.
Full-time positions increased 16,000, while part-time work dropped by about 1,000.
While the month's job creation was modest, and the labour force report portrayed signs of continuing weakness in Canada's job market, it could have been a lot worse, economists said.
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In July, the Canadian economy shed 55,000 jobs. And in the United States in August, employers cut positions for the eighth month in a row, eliminating 84,000 jobs last month and driving the unemployment rate up to 6.1 per cent.
"It's a small blessing for the Conservatives," said pollster Peter Donolo with Strategic Counsel in Toronto.
"At least for this month, [Prime Minister Stephen] Harper can reaffirm what he said last week: That things aren't tanking," Mr. Donolo said.
The Conservatives aren't home free on the economic front, however. Mr. Harper is expected to call an election tomorrow to take place on Oct. 14. That leaves time for Statistics Canada to issue one more jobs report on Oct. 10 - so close to voting day that it will likely have a bigger impact on voting intentions than yesterday's report, Mr. Donolo said.
Finance Minister Jim Flaherty was quick to jump on the contrast between the Canadian and U.S. numbers. "Thanks to the leadership of Prime Minister Stephen Harper, our economic fundamentals remain solid," Mr. Flaherty said in a statement yesterday. "Our labour market continues to outperform that of the U.S. - while more than 85,000 jobs have been created in Canada since the start of the year, the U.S. has lost more than 600,000."
The Conservatives will likely take solace from the Ontario job numbers in particular, Mr. Donolo said. The vote-rich province is in the midst of a mild recession, but its job market is not the disaster most Ontarians associate with economic contraction.
Rather, Ontario added 14,000 jobs in August, with almost 39,000 full-time positions partly offset by the loss of 25,000 part-time positions. The province's unemployment rate is now 6.3 per cent, which, while still above the national average of 6.1 per cent, is not too worrisome for an economy that has struggled with plant closings and sagging exports.
For the Conservatives, the Ontario jobs report "is helpful here because it doesn't deepen the sense of pessimism," Mr. Donolo said.
The Liberals have argued that Mr. Harper deliberately manufactured political chaos to justify calling an election this fall so that he could go to the polls before the economy turned too sour.
Yesterday's labour report does not destroy that argument. Indeed, economists and Statistics Canada saw numerous signs of softening in the Canadian labour market.
Job growth in Canada has slowed markedly compared with last year, Statscan pointed out. Since the beginning of 2008, the economy has added 87,000 new positions, an increase of just 0.5 per cent. A year ago, Canadian employers had created 221,000 to date, an increase of 1.3 per cent.
Over the past six months, total employment in Canada has actually declined, by 2,800 positions. That's the first time since 1995 that the job market has contracted over a six-month period, noted Douglas Porter, deputy chief economist at BMO Nesbitt Burns.
And over the past year, full-time employment has barely increased, while the number of part-time jobs has grown more robustly. The divide is most noticeable among adult men: They have seen 1.4-per-cent growth in full-time positions in the past 12 months, but an 8.3-per-cent increase in part-time positions.
Hiring in the education, construction, and hotel and food industries drove the 15,000 gain in employment in August, but the gains were almost entirely offset by scaling back in agriculture, health care and public administration.
The soft jobs report, along with data released last month showing Canada's economy contracted slightly in the first half of the year, led one major forecaster to revise down its projections for the Canadian economy this year and next.
Global Insight predicts the Canadian economy will only register growth of 0.8 per cent in 2008, and 1.7 per cent in 2009, both of which are lower than the firm expected last month and far below the 3-per-cent growth rate that is considered normal and healthy for the Canadian economy. Canadian growth will lag the United States this year, although Canada will pull into the lead next year, the firm predicted.
Unemployment rate
6.1 per cent (6.1)
Number unemployed
1,112,500 (1,105,200)
Jobs gained
15,000 (-55,200)
Men (25 and up)
5.3 per cent (5.4)
Women (25 and up)
5.0 per cent (4.8)
