Canadian job market kept recovering in July

Last month, the national labor market kept recovering, supported by lifted restrictions. However, the increases turned out to be smaller than expected.

According to Statistics Canada, the economy added 94,000 jobs in July, while experts predicted 150,000 positions. As a result, the unemployment rate was down from June’s 7.8% to 7.5%.

The report proves that the economic recovery continues and companies are searching for workers as the pandemic restrictions are lifted. Although the smaller-than-expected gain may cause some doubt concerning the pace of hiring, the increases were mostly in full-time private-sector employment, especially among youth and women.

Such a performance shows that Canada’s economy has more than fully offset the losses of a third wave of the pandemic. Last month’s growth follows a 231,000 jobs increase reported in June. Those two months offset the 275,000 jobs lost in April and May.

As a result, 2.74 out of the 3 million jobs lost at the beginning of the crisis were already recovered.

Meanwhile, according to another report, the U.S. economy added 943,000 positions in July.

In spite of the wrong forecast, the Canadian results will hardly change the expectations that the Bank of Canada will keep reducing its stimulus, with rate hikes expected by certain economists in 2022. The reason is the high quality of the newly created jobs.

“The composition is more favorable,” – Dawn Desjardins, deputy chief economist of RBC, says. “Yes, the total numbers are missed, but adding more full-time jobs is certainly a good sign for the economy that will support the recovery pace”.

Such results will give Prime Minister Justin Trudeau a possibility to show his record of managing the COVID-19 crisis before an election which is expected to be called for next month.

In September, Justin Trudeau promised to create one million jobs, and the economy is very close to it. Many expect Trudeau to call an election during a few weeks.

Nevertheless, numerous issues remain, including a new wave of lockdowns caused by the global spread of the delta variant.

According to the BoC, the employment needs to outpace pre-pandemic levels in order to fully recover, as the population has grown since the beginning of the pandemic crisis.