Canadian employers unexpectedly cut
30,400 jobs in July, and the unemployment rate increased, as the
country’s retailers and wholesalers let go part-time workers.
The job losses, all in part-time work, were the most since
October 2011, Statistics Canada said today from Ottawa. The
jobless rate rose to 7.3 percent from 7.2 percent in June.
Economists projected the unemployment rate would remain
unchanged at 7.2 percent and that employment would increase by
6,000, according to the median in a Bloomberg News survey of 25
Investors pared bets Bank of Canada Governor Mark Carney
will raise borrowing costs with odds of an increase by April
falling to 33 percent at 10:53 a.m. in Toronto, according to
overnight index swaps. That’s down from 45 percent just before
today’s release. Yields of Canada’s two-year government bonds
declined to 1.13 percent, from 1.16 percent late yesterday.
“Governor Carney wasn’t particularly close to raising
interest rates any time soon and the trend over the last few
months towards softer employment growth is consistent with him
wanting to wait quite a while before moving on that threat,”
Avery Shenfeld, chief economist at Canadian Imperial Bank of
Commerce, said in a telephone interview from Toronto.
“We certainly don’t see any prospect of a rate hike from
the Bank of Canada this year and potentially right through next
year if the global economy doesn’t significantly accelerate,”
The July drop means Canada’s economy has lost a net 15,400
jobs since the start of May, the worst three-month performance
since the end of last year.
Carney has kept his key lending rate at 1 percent since
September 2010, the longest pause since the 1950s, and in July
cut his economic growth forecast citing global weakness and the
weakest export recovery since World War II.
In an interview with British Broadcasting Corp. broadcast
yesterday, Carney said higher borrowing costs may be required
because Canada is in a “very different place” than economies
like the U.K. that are in crisis.
Canada’s dollar, nicknamed the loonie, fell 0.11 percent to
99.22 cents per U.S. dollar in Toronto. One Canadian dollar
Services-producing sectors led declines in today’s report
with wholesale and retail businesses losing 30,000 jobs.
Professional, scientific and technical services employment fell
21,600 workers in July while public administration declined by
17,000. Goods producers reduced employment by 13,200, with
employment in natural resources declining 8,900 and
manufacturing losing 18,400.
Full-time jobs increased by 21,300 in July, Statistics
Canada said. Part-time employment fell by 51,600 positions.
Quebec led declines, with the province cutting 28,700 workers,
all in part-time employment.
The number of payroll employees declined by 15,600 and the
self-employed fell by 14,800 workers.
Average hourly wages of permanent employees rose 3.9
percent in July from a year earlier, faster than June’s 3.3
percent pace and the highest since April 2009.
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