Ottawa-Gatineau sheds 3,000 jobs in August; second straight month of declines

Fed hiring

The number of people working in the National Capital Region fell for the second straight month in August to reach the lowest level since last September, Statistics Canada reported Friday.

There were 721,700 people working in Ottawa-Gatineau last month, down 3,000 people from July.

The region has shed 7,600 jobs since March.

However, a sharp decline in the number of people looking for work meant the region’s unemployment rate actually declined from 6.3 per cent in July to 5.9 per cent in August.

The latest job reports casts a shadow over Ottawa’s economic rebound under the Liberal government, which replaced the Conservative’s cost-cutting efforts with stimulus spending that coincided with a dramatic increase in the number of Ottawa-Gatineau residents working for the federal government. In less than a year, the size of the local federal workforce ballooned by 26,300 residents to reach a high of 153,800 staff in May.

Since then, however, the federal government has trimmed its payroll by nearly 10,000 residents to reach 143,700 local residents.

Friday’s Statistics Canada report contained some positive news. Employment levels in the closely watched tech sector reached its highest level since November as employers hired 1,600 staff.

Nationally, the increase of 22,200 jobs last month also helped nudge Canada’s unemployment rate to a nine-year low of 6.2 per cent, down from 6.3 per cent in July.

Looking beyond the more-volatile monthly numbers, the labour market in Canada grew 2.1 per cent in August compared to a year earlier.

From the addition of 374,300 net new jobs, 57 per cent of them were full time.

The jobs data provided yet another sign of Canada's healthy economic trajectory.

The country's surprisingly solid start to 2017 has already motivated the Bank of Canada to hike its interest rate twice this year, including an increase earlier in the week.

Some economists said Friday's numbers validated the central bank's move and helped support predictions of another rate increase before the end of the year – or perhaps as soon as next month.

“If you actually look over the last 12 months, we've had remarkably strong job creation,” said Craig Alexander, chief economist for the Conference Board of Canada.

“The Canadian economy is showing a lot of momentum.”

The August figures also contained another promising development: a long-awaited improvement in wage growth.

Compared to a year earlier, average hourly wages expanded at a faster rate than inflation to reach 1.8 per cent. It marked their biggest year-over-year increase since last October.

The Bank of Canada noted earlier in the week that wage growth had been “more subdued” than historical trends have shown.

“It has sort of been the missing ingredient,” said Alexander, who added that wage growth usually starts to rise after job creation increases and the unemployment rate falls.

RBC assistant chief economist Paul Ferley said the wage-growth number provided tentative evidence that pressure is building on a tightening job market.

“We just have to see whether it continues,” Ferley said.

But while the exterior of Friday's jobs report looked good, the monthly data also featured several blemishes.

The August growth was fuelled by less-desirable work, as the economy added 110,400 part-time jobs and shed 88,100 full-time positions.
Statistics Canada said most of the decline in full-time work was concentrated among young Canadians aged 15 to 24 years old. The youth category also showed a notable decrease last month in participation as fewer young people looked for work, leading analysts to suggest the back-to-school factors made a contribution.

The data also showed a decline of 10,400 paid employee positions, while the number of people who described themselves as self-employed, including unpaid workers in family businesses, rose by 32,700.

“While very solid on the surface, the details of this report are generally sluggish, leaving a mixed bag,” BMO chief economist Doug Porter wrote in a research brief for clients.

By industry, the services sector gained 35,900 jobs while the number of factory positions fell by 13,700. The goods-sector slide was led by a loss of 11,100 manufacturing positions.

Ontario posted the only notable gain among provinces, while employment declined in Nova Scotia. The headline job numbers were little changed in the other provinces, Statistics Canada said.

The streak of nine-straight months of job creation marked Canada's longest run since February 2008, when employment rose for a 10th-consecutive month.

“Overall, as much as it might be argued that the components of the report were sub-par, job expansion continues unabated, reflecting sustained economic momentum and businesses and consumers brimming with confidence,” Desjardins senior economist Jimmy Jean wrote in a research note.

With reporting by The Canadian Press.