Economy adds 12,000 jobs in September, unemployment rate rises to 7.1 per cent

The Canadian economy added 12,000 jobs in September, but the unemployment rate climbed to its highest level since February 2014 as more people entered the labour force.

OTTAWA — The Canadian economy added 12,000 jobs in September, but the unemployment rate climbed to its highest level since February 2014 as more people entered the labour force.

The gains were entirely to increased part-time work, which added 74,000 jobs, while full-time employment fell by 62,000.

“This month’s Canadian labour force survey saw the bouncing ball land on green, but it was no winner despite a decent headline,” said BMO chief economist Doug Porter, calling the loss in full-time jobs the “biggest clunker.”

However, he noted that it was an “odd” report including the 51,000-plunge in the educational services sector, which contributed to the overall loss of nearly 34,000 jobs in Ontario.

Statistics Canada said the number of people working in the education sector increased, but less than typically observed, resulting in the drop in the seasonally adjusted result.

“The plunge in education employment looks plain weird, and is likely to partly reverse next month,” Porter said.

“Probably the single truest measure in this report is the slow upward grind in the unemployment rate — with the economy only managing to grow about one per cent in real terms over the past year, it’s no shock that the jobless rate is nudging higher.”

The September jobs report was the last major piece of economic data before the federal election on Oct. 19.

The economy has been a major topic on the campaign trail as it has struggled to find a footing after contracting in the first half of the year.

The Bank of Canada has cut its key interest rate twice this year in a bid to help an economy which contracted in the first half of the year due in large part to the drop in oil prices.

In its business outlook survey, also released Friday, the central bank said business sentiment remains tepid as firms’ expectations are diverging as they adjust to weaker commodity prices and a lower Canadian dollar.

The central bank says forward-looking indicators of business activity have improved, supported by a generally positive outlook for the U.S. economy and a weaker loonie.

However, persistent weakness in commodity prices are continuing to work their way through the economy, dampening the outlook for firms tied to the resource sector.

TD Bank economist Diana Petramala said the worst of the economic soft patch is now behind us, but challenges remain.

“For one, we continue to expect a modest pace of hiring due to a lagged impact of past weakness in real GDP growth, with the unemployment rate holding steady relatively lofty at around 7.0 per cent through the next year,” she said.

“Second, the oil sector will continue to be a sore spot for the economy with oil prices remaining low.”

In its September labour force survey, Statistics Canada said the number of self-employed increased by 31,000 in September, while public sector employment fell 29,000. The number of private sector employees climbed by 10,000.

Regionally, British Columbia and Alberta both posted gains of 12,000 jobs, while Manitoba increased by 4,000.

However, Ontario saw a drop of nearly 34,000 jobs in September as losses in full-time employment were partly offset by gains in part-time work. Quebec added 11,000.

For the third quarter, the economy added 31,000 jobs compared with 33,000 in the second quarter and 63,000 in the first three months of the year.