Jobs report suggests weakness: economists

Both the number of people employed and the unemployment rate rose in August, Statistics Canada said Friday.

Bank economists concluded the report pointed to slower economic growth.

Statistics Canada said an additional 36,000 people got jobs in August, but the unemployment rate rose 0.1 percentage points, to 8.1 per cent, as a larger number of people sought work. That raised the number of unemployed by 17,800, to slightly more than 1.5 million.

Statistics Canada said the higher unemployment rate resulted from the addition of about 53,500 people looking for jobs.

The 36,000 gain in jobs, meanwhile, was based on a big jump in the education sector, where a 68,000 increase in August simply offset a similar decline in July, Statistics Canada said.

Excluding the bounce in education jobs, employment actually fell by about 32,000, economists at BMO Capital Markets and CIBC said.

"Details of the report were mixed, but aside from a pop in full-time jobs, they were generally on the weak side," BMO economist Doug Porter said. Although aspects of the report were positive, the overall picture is "consistent with a broader loss of momentum in the Canadian economy."

CIBC economist Krishen Rangasamy said the bank expects "the Canadian labour market to ramp down a notch, in line with a much slower economy."

Quebec, Saskatchewan, and Newfoundland and Labrador all reported big job gains, but employment in the other provinces was little changed.

There were gains in education, professional, scientific and technical services, and in natural resources.

Manufacturing, support services for business, building and other industries, and information, culture and recreation all fell.

Full-time employment rose by 80,000 in August, while part-time employment fell by 44,000. The overall increase was almost equally split between men and women over 25.

Students faced a "challenging" summer, with an average unemployment rate of 16.8 per cent for people aged 15 to 24. The rate is better than the summer of 2009, when 19.2 per cent of students were unemployed, but high compared to the summer of 2008, when the rate was 13.6 per cent.

Overall, strong employment increases in the first half of the year, when the monthly number of new jobs averaged 51,000, tailed off to an average of 13,000 in July and August, Statistics Canada said.

Canadian Auto Workers union president Ken Lewenza said the job situation should encourage the government to extend special Employment Insurance stimulus measures past the cut-off date on Saturday.