Waterloo Region unemployment rate hits lowest level since 2005
Published Friday, September 8, 2017 10:30AM EDT Last Updated Friday, September 8, 2017 2:37PM EDT
The labour market expanded for a ninth-consecutive month to register its longest job-creating streak since before the financial crisis nine years ago, Statistics Canada said Friday.
The increase of 22,200 jobs last month also helped nudge the 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 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 big news locally was in Waterloo Region, where unemployment fell from 4.8 per cent to 4.4 per cent. It was the third straight month the region’s unemployment rate dropped, and 4.4 per cent marks its lowest level since January 2005.
Brantford saw unemployment hit its highest level of 2017, rising from five per cent to 5.3 per cent, while Guelph’s rate jumped from 4.5 per cent to 4.7 per cent.
In the Stratford-Bruce Peninsula economic region, unemployment rose from a long-term low of 2.9 per cent to 3.4 per cent.
According to the Four County Labour Market Planning Board, the change was due to an increase in the number of people looking for work.
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.