Canada's job market added 90,000 positions in August, for the third consecutive monthly gain.
Statistics Canada says the unemployment rate fell 0.4 percentage points to 7.1 per cent, the lowest since the pandemic began.
The job gains were stronger than expected and reflect further reopening across the county to varying degrees. Indoor dining, personal care, entertainment, and recreation were back with capacity limits. Fully vaccinated Americans were also allowed back to Canada for non-essential trips without having to quarantine.
Most of the gains were in the private sector (77,000). They were also mostly full-time (69,000) with services-producing industries, accommodation and food services being the biggest driver.
Economic recovery is not complete
The August gains bring Canada’s job market to within 156,000 jobs of its February 2020 level.
Gains were concentrated in Ontario, Alberta, Saskatchewan and Nova Scotia, while the rest of the country was little changed.
Total hours worked were little changed and are 2.6 per cent below pre-pandemic levels, which Stephen Brown, senior Canada economist at Capital economics says could be a bad sign for the economic recovery,
“That doesn’t give us much confidence that GDP rebounded strongly in August, following the preliminary estimate that it declined by 0.3 per cent month over month in July, although the link between hours worked and GDP has been fairly loose in recent months,” said Brown.
Competing for workers
The number of people who worked at least half their usual hours fell 1.8 percentage points to 24 per cent, the lowest since the start of the pandemic.
Brendon Bernard, senior economist at Indeed Canada, notes the number of workers who switched jobs in August surpassed pre-pandemic levels, which he says raises questions about how employers will deal with a tightening labour market.
"If staffing challenges extend beyond just attracting new workers to retaining current employees, the pressure to hike pay could rise," said Bernard.
"At the same time, uncertainty over the future course of both the pandemic, as well as government support programs for businesses and households, could cause some employers to hold off on major changes to compensation."
Jessy Bains is a senior reporter at Yahoo Finance Canada. Follow him on Twitter @jessysbains.