Economy adds 31,000 jobs in September

Canada's unemployment rate fell to 8.4 per cent in September from 8.7 per cent the previous month, Statistics Canada said Friday.

The economy gained 31,000 jobs during the month, "driven by large full-time gains," the agency's monthly labour force survey said.

The numbers marked the first decline for Canada's jobless rate since the economic downturn started sapping employment ranks in the fall of 2008.

"September's full-time increase of 92,000, the largest since May 2006, was partially offset by part-time losses of 61,000," the survey said. "The increase in full-time work was mainly among youths and women aged 25 and over and in Ontario."

Ontario's gains were spurred by an improvement in the battered manufacturing sector. Manufacturing employment increased by 26,000 in September, the first notable increase since February 2009. Employment in this industry had the sharpest rate of decline since the start of the labour market downturn in the fall of 2008, down 10.6 per cent or 210,000 jobs.

Ontario added 62,000 full-time jobs, but lost 49,000 part-time positions, leaving its unemployment rate at 9.2 per cent for September.

The survey noted that Canada's most populous province has lost 2.9 per cent of the jobs it had in October 2008.

"The growth leaders were manufacturing and construction, the very two sectors that had been hardest hit by the recession, and a classic recovery indicator," BMO economist Douglas Porter said. "

In the past six months, the Canadian economy has managed to lose next to no jobs, yet in the prior six months (ending in March) the economy shed some 354,000 positions, he noted.

Speaking at a groundbreaking ceremony at Niagara College in Welland, Ont., Prime Minister Stephen Harper said Friday's unemployment numbers presented a mixed picture.

"We have some good news today," he said, but cautioned: "I don't think we're out of the woods."

Harper said there is still worry about the health of the U.S. economy, adding that we "have to be realistic" because U.S. problems put a drag on the Canadian economy.

Gender divide

The data showed a clear split along gender lines. The category for women aged 25 and over added 41,000 jobs, while males in the corresponding age bracket had 17,000 fewer jobs. That's in keeping with the trend since October, as some 211,000 fewer males have jobs since then.

The province showing the most gains was British Columbia, which added 14,000 jobs and saw its unemployment rate drop .04 percentage points to 7.1 per cent. New Brunswick and Prince Edward Island also saw their rates drop.

In Manitoba, the unemployment rate was 5.3 per cent in September, down from 5.7 per cent the previous month.

Canada's total employment has fallen by 2.1 per cent since its peak in October 2008, the statistics agency said.

'Future employment gains are likely to be considerably more muted.' —Diana Petramala, TD Bank economist

Diana Petramala, an economist with the TD Bank, said she remained cautious about reading too much into a two-month spurt in job creation.

"Future employment gains are likely to be considerably more muted," she said in a commentary. Petramala said the Cash for Clunkers program in the U.S. —which gave strong support to Canadian manufacturing during the summer— is now over and that manufacturing gains in the fall may be more muted. 

Manufacturing will also be affected by a stronger Canadian dollar. She  found that residential construction, which rebounded in the spring, has been more subdued through the summer.

In addition, employed Canadians have been working more hours of late. While the number of hours worked decreased 4.2 per cent from October 2008 until April 2009, since then, there has been a two per cent increase in hours worked.

That happened as employment edged down 0.2 per cent from April to September.

The increase in average hourly wages slowed to 2.5 per cent compared with September 2008. This was the lowest year-over-year growth in 2½ years.