- The Canadian labour market added 94k positions in July, below the consensus call for 150k. This left employment 1.3% below its pre-pandemic (February 2020) level. Gains were predominantly in full-time positions (+83k). Part-time employment advanced 11k in July.
- Canada’s labour force expanded by 24k in July. With stronger job growth, the unemployment rate fell by 0.3 percentage points to 7.5% in July, matching the post-February 2020 low hit earlier this year.
- By industry, gains were concentrated in the services sector (+93k) in July. Driving the increase were accommodation and food services (+35k) and finance, insurance, real estate, rental and leasing (+15k). There was not much employment growth in the retail trade, and information, culture and recreation industries due to ongoing travel restrictions, and capacity limitations.
- There was little change to employment in the goods-producing sector, but manufacturing employment added 9k positions in July after declining for two straight months.
- In terms of provinces, Ontario accounted for the majority of July’s improvement, as employment increased by 72k in the province. Manitoba (+7k), Nova Scotia (+4k), and Prince Edward Island (+1k) also saw employment advance on the month. New Brunswick (-3k), Saskatchewan (-5k), and B.C. (-3k) lost jobs in July.
- Lastly, total hours worked improved by a robust 1.3% in July, but it is still 2.7% below its pre-pandemic level.
Key Implications
- It was another solid month for the Canadian labour market as the loosening of public health restrictions across the country spurred hiring activity. That said, capacity limits and travel restrictions, held back high-touch businesses from operating at full capacity, limiting job gains in July.
- Indeed, employment in high-touch services is still well below pre-pandemic levels. Even with gains in July, accommodation and food services employment was nearly 20% below its February 2020 level. It’s important to note that July’s labour survey was taken during the week of July 11th and restrictions in some provinces were loosened at the end of that week. So, we could see the recovery continue to strengthen in August.
- There are growing headwinds, however. Concerns around the Delta variant are rising and some countries, harder hit by the virus, are re-imposing restrictions. Canada has not yet been compelled to do so due to low hospitalization levels, but cases are rising. While the impressive vaccination drive should keep hospitalization rates low, health worries could dent consumer and business confidence. Indeed, the economy’s path forward will be closely linked to evolution of the pandemic.
