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Economy added 94,000 jobs in July, largely in the services sector: Statistics Canada

Rise came largely in full-time work, which rose by 83,000 or half a percentage point
A help wanted sign is displayed at car wash in Indianapolis, Wednesday, Sept. 2, 2020. Statistics Canada will reveal this morning how the labour market fared in July as restrictions meant to quell the COVID-19 pandemic were rolled back in many provinces. THE CANADIAN PRESS/AP-Michael Conroy

Statistics Canada says the country added 94,000 jobs in July as public health restrictions linked to the COVID-19 pandemic continued to be lifted, but economists warned there is still a “long slog” toward a full recovery ahead.

The federal agency said Friday that the job gains caused the unemployment rate to fall to its lowest level since March of this year, at 7.5 per cent for July compared with 7.8 per cent in June.

The gains were seen primarily in Ontario and in the service sector, with 35,000 jobs added in the accommodation and food industry.

The rise came largely in full-time work, which rose by 83,000 or half a percentage point and occurred in multiple sectors.

Many economists had expected the country to add at least 100,000 new jobs during July and thought the unemployment rate would sit around 7.4 per cent last month.

“While the headline tally may have come in a tad light of meaty expectations, it’s still a healthy advance, and there were some clear flashes of strength beneath the hood,” said Douglas Porter, BMO Capital Markets’ chief economist, in a note to investors.

He saw positive signs in the number of full-time positions added and the 1.3 per cent increase in total hours worked, though that figure was still 2.7 per cent below pre-pandemic levels.

“It will only take a few more reports like today’s to get employment all the way back to pre-pandemic highs,” Porter said.

He predicted the country will see one more employment bump before it settles into a “long slog” as job gains tied to reopening dissipate and the economy begins to more seriously deal with the Delta variant of COVID-19.

Canada is still 246,400 jobs, or 1.3 per cent, shy of pre-pandemic employment levels seen in February 2020.

The number of people considered long-term unemployed — those out of work for more than six months — in July was 244,000 higher than before the pandemic and accounted for 27.8 per cent of total unemployment. Of that number, more than two-thirds have been out of work for a year or longer, Statistics Canada said.

Like Porter, CIBC senior economist Royce Mendes believes job gains will be harder to earn in the coming months.

“Gains are likely to slow from here, with many employers reporting labour shortages due to generous government support, concerns about contracting COVID in high-contact work settings, and childcare duties,” he wrote in a note to investors.

However, he also said July’s increase continues the pattern begun with the 231,000 jobs added in June and can be considered a strong gain, making up for employment losses incurred during the third wave of the COVID-19 pandemic.

The Canadian Press

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