Canada Monthly Jobs Gain Eases Worry of Oil-Driven Recession

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Canada’s jobs market is showing enough sustained momentum in pockets of the economy to ease worries the nation is bogged down in a recession.

The economy added 6,600 jobs during the month, leaving the nation’s unemployment rate unchanged at 6.8 percent, Statistics Canada said Friday in Ottawa. Employment has risen by 102,500 since December.

The employment gains, while sluggish, are defying gross domestic product data that show Canada’s economy probably contracted in the first two quarters of the year, making it difficult to label the downturn as a recession, said Doug Porter, chief economist at Bank of Montreal.

“The good news is the weakness we’ve seen in GDP isn’t morphing into a broad-based decline,” Porter said by telephone. “The bad news is it more or less confirms that growth is mediocre at best, that we’re not going to get a lot of support from the non-resource sector of the economy.”

Whether Canada has fallen into a recession has become a political issue ahead of the Oct. 19 vote. Prime Minister Stephen Harper came under attack for the downturn in a televised leaders’ debate Thursday, even conceding the country may be in a technical recession, defined as two quarterly contractions in output.

Manufacturing Weakness

“What I am saying is that that contraction is exclusively in the energy sector,” Harper said Thursday. “The rest of the economy has grown.”

Friday’s data show services-related industries continued to offset job losses in manufacturing and natural resources. The gains also reflected more self-employed and part-time work, with the number of full-time jobs falling 17,300.

Weakness in manufacturing employment has also been a puzzle to policy makers given the depreciation of the Canadian dollar, which typically helps exporters. Factory employment dropped by 4,600 workers in July in a sector that has had no growth in employment over the past 12 months.

The economy has gained 161,400 jobs over the past 12 months, even as it lost 24,800 in goods-producing industries.