Canadian economy adds jobs despite rising unemployment rate

The economy added 31,800 jobs in June and the unemployment rate rose to 6% from 5.8% in May, Statistics Canada said in its latest Labor Force Survey.

Many badysts see the rise in the unemployment rate as an encouraging sign, as the influx of nearly 76,000 job seekers into the market last month suggests that more people are optimistic about finding work.

The release of this Labor Market Report, which also contained weaker data points, comes less than a week before the Bank of Canada's next interest rate decision next Wednesday.

before the figures were released, economists were already expecting Governor Stephen Poloz to raise his key interest rate for the first time since January. The central bank's target for the overnight rate is currently 1.25%.

For many, employment figures reinforce these predictions.

This report was more than enough to seal the spell a rate hike in July at the Bank of Canada

Ms. Donald highlighted the strength of some key indicators, including a higher participation rate and wage gains still strong.

Average hourly wage growth, which is closely monitored by the Bank of Canada when it prepares its interest rate decisions, remained steady last month at 3.6% . However, it fell from its May high of 3.9%.

Predictions that Poloz is about to raise interest rates, which will likely lead to major Canadian banks to raise their preferential rates, hold good even if the economy is facing significant uncertainty.

Among the unknowns are Canada's trade dispute with the United States and the difficult renegotiation of the Free Trade Agreement. North American Exchange (NAFTA). In addition, many fear global disruptions that may arise from the escalation of the trade war between the United States and China.

Ms. Donald believes that Mr. Poloz will not be chilled by trade uncertainties because he has already indicated that they remain largely hypothetical at this stage.

Some weaknesses observed

Jobs Report Friday showed that, compared with the same month a year ago, employment was up 1.2% in June thanks to the creation of 214,900 jobs. This increase is attributable to the appearance of 284,100 new full-time positions.

But a closer look at the June figures reveals some weaknesses.

Canada added 9,100 full-time jobs in June and 22,700 part-time jobs, while self-employment increased by 22,000 jobs.

The public sector gained 11,800 jobs and the private sector lost 2000.

Matthieu Arseneau, Economist deputy head of the National Bank, noted that since the beginning of 2018, total employment has decreased by 48,000 jobs in the private sector.

"It remains to be seen if a rebound in the private sector will occur Given growing trade uncertainties, "Arseneau wrote in a research note.

By sector, the figures show that goods-producing industries created 46,600 jobs in June, thanks to gains in construction, natural resources and manufacturing.

The service sectors, on the other hand, lost 14,700 jobs, mainly because of significant decreases in accommodation and food services, as well as in commerce.

Ontario registered a net gain of 34,900 jobs, up 0.5% from the previous month, while Saskatchewan posted its largest monthly gain in more than six years with the creation of 8300 jobs, which represents a growth of 1.5%.

The youth unemployment rate rose to 11.7% last month, from 11.1% in May. [19659025] Broader Trade Deficit

In a separate report released on Friday, Statistics Canada reported that the country's trade deficit with the world widened in May to nearly $ 2.8 billion. The international trade deficit was about $ 1.9 billion in April and $ 3.9 billion in March.

May's figures show that imports rose 1.7%, while exports decreased by 0.1%.

The increase in imports of aircraft, other transportation equipment and energy products fueled most of the increase. The value of aircraft imports more than tripled to $ 937 million as a result of the purchase of several airliners from the United States.

Exports decreased mainly due to the slowdown in motor vehicles and their parts, as well as non-metallic minerals and minerals.

Report shows Canada's trade surplus with the United States narrowed to $ 3.3 billion in May, compared to $ 3.7 billion in April, due to higher US imports and lower Canadian exports.