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Employment Increase Continues String of Good Economic News

September 08, 2017

The Conference Board of Canada’s Chief Economist Craig Alexander offers the following perspectives/insights:

Quote

“The Bank of Canada has signalled that future changes in monetary policy will be data dependent, and today's news that wage growth picked up will increase speculation of a rate hike in October,”
—Craig Alexander, Senior Vice-President and Chief Economist, The Conference Board of Canada.

Insights

  • Employment grew by 22,000 jobs in August. While not a particularly strong result by itself, it brings the total number of new jobs created over the last year to a staggering 374,000.
  • Full time positions fell by 88,000 while part time employment grew by 110,000. Despite the drop in full time employment this month, almost 60 per cent of the new positions created over the last year have been full-time jobs.
  • The most positive piece of news in the jobs report was the pick up in wages. Year-over-year wage growth accelerated to 1.8 per cent while year-over-year wage increases for full time employees reached 2.0 per cent. This is well above inflation estimates over the last year, meaning employees are finally seeing increases in real wages. The consumer price index posted a year-over-year increase of just 1.2 per cent in July.
  • From a sector perspective, the employment growth was concentrated in the services sector. Services industries created an additional 35,900 positions, with the strongest hiring occurring in finance, insurance, real estate and leasing. Employment in goods-producing industries fell 13,700 jobs, led by a 11,100 decline in manufacturing positions and a 7,700 decline in natural resources employment.
  • The unemployment rate fell to 6.2 per cent, the lowest rate since October 2008. 
  • The good employment report was not the only piece of news released today showing a strong economy. Capacity utilization increased to 85 per cent its highest level since 2007. This adds to evidence that the economy is operating near full capacity and increases the possibility of further interest rate increases this year.

Watch an interview with Craig Alexander.

 


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Photo of Craig Alexander Craig Alexander
Senior Vice-President and Chief Economist

Craig Alexander brings over 19 years of experience in the private sector as an economic and financial forecaster to the position of Senior Vice President and Chief Economist. He oversees the Board’s macro-economic outlook products, custom economic and tourism research.

Follow Craig on Twitter

@CraigA_Eco


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