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Unemployment drops to lowest rate in almost 9 years

August 8th, 2017  |  Canadian Business

July marked Canada’s eighth straight month of job growth, bringing the unemployment rate to 6.3%, the lowest it has been since October 2008.

Following May and June’s combined job growth of almost 100,000 Canadian jobs, July saw another over 10,000 new jobs added. This growth knocked unemployment down another 0.2%, which brought the rate to 6.3%.

“We can forgive the economy for taking a bit of a breather on job gains in July, given how torrid the pace has been in the prior two months,” said Avery Shenfeld, chief economist of CIBC Capital Markets.

In Ontario, overall employment grew to 26,000, while Alberta lost 14,000 jobs on a whole. Contributing to the rise of employments were the 22,000 jobs gained in the wholesale and retail trade sector, as well as the 18,000 added in culture and recreation, and an increase of 14,000 in manufacturing. On the flip side, 32,000 jobs were lost in the educational services, mainly in Ontario and Alberta.  

This latest economic data comes on the heels of the Bank of Canada’s decision last month to raise key interest rates for the first time in almost 7 years.

Benjamin Reitzes, a Canadian rates and macro strategist at BMO Capital Markets, believes that the Bank of Canada will wait until October to raise interest rates again, as there are many economic factors that will occur before then that will influence their decision.

“It’s tough to see anything really derailing them outside of broadly weaker numbers for October,” Reitzes said. “They’ve been clear they want to take back the 50 basis points of easing they put in in 2015, so a hike in October would do that.”