The Canadian unemployment rate dropped to 6.3% in July, marking a nine-year low. In the past year, 387,600 jobs have been created, the most in nearly a decade. These continuing job gains are consistent with Canada’s overall economy who posted a 3.7% increase in GDP in the first quarter, and early estimates see another 3.7% increase in the second quarter. This growth leads all G7 nations. A report from BMO touched on the job gains adding:
"If the heady pace continues until year end, the unemployment rate could breach pre-recession levels that marked the best job prospects since the mid-70s"
Canadian Unemployment Rate Falls As Full-Time Jobs Up
Canada added 11,000 jobs in July. Job gains in July represented higher full-time employment as part-time jobs fell during the month. Amazingly, of the 387,600 jobs added in the last year, 90% have been full-time. BMO pointed out the increase in full-time jobs has been evidenced by the strongest half-year gain in retail volumes in over a decade.
Canadian unemployment rate down amid Near Full Employment
Among all the job creation, 134,500 were in the public sector, which now accounts for one in every five Canadian jobs. Manufacturing has bounced from record lows, and even amid the retail apocalypse, retail hiring rose by 123,100 jobs.
BMO also added:
A tightening labour market is reeling in discouraged job seekers, lifting the participation rate for prime-age workers (25-54 years of age) to record highs. As a result, the overall participation rate (65.7%) has steadied, despite the downward pull from retirees.
Despite the job gains, wage growth has remained weak. Average hourly wages are up 1.3% yoy for July - one of the slowest rates on record. BMO suggests wage growth has been mild because of the replacement of higher-paid employees with less expensive, younger workers. The lack of growth implies full employment has yet to be reached.
With an inflated housing market beginning to cool, one could argue there is some uncertainty over Canada's economy. The thriving job market likely can't sustain this growth; BMO concludes "After a blowout year, Canada’s jobs engine will likely stop humming but keep on running."