Canada sheds 31,200 jobs in July, unemployment rate rises to 6.9%

The loonie tumbled Friday, losing more than eight-tenths of a cent against the U.S. dollar, in the wake of a weaker-than-expected Canadianemployment report

The economy lost 31,200 jobs in July as the number of workers with full-time jobs fell dramatically and fewer younger people were employed, Statistics Canada reported today.

Analystshad expected Canada's economy would create about 10,000 jobs last month.

• Canada's GDP shrank by 0.6% in May, worst month in more than 7 years
• Bank of Canada stands pat again despite worries about Brexit and house prices

The unemployment rate ticked up to 6.9 per cent, up from 6.8 per cent in June, anincrease in line with economists'forecasts.

The Canadian dollar fell 0.83 cents US to close at75.96cents USas the U.S. economy generated a better-than-expected 255,000 jobs last month, leading to speculation that the Federal Reserve may resume raising U.S. interest rates later this year.

Big drop in full-time work

Statistics Canada said the number of full-time workers fell by 71,400the biggest one-month decline since October 2011.

The loss in full-time jobs was partially offset by an increase of 40,200 part-time jobs, the federal agency said.

Younger Canadiansalso had a tough time finding work, as there were 28,000 fewer jobs for the age 15to24 group.

Public-sector employment fell by 42,000 in July, while private-sector employment rose slightly.

Census effect disputed

Some analysts said the big drop in public sector employment may have been dueto the end of thousands of jobs for census-takers. But others didn't think that was the reason and Statistics Canada agreed.

"We have been monitoring employment in census-related occupations such as 'survey interviewers and statistical clerks'in federal public administration," said Statistics Canada analystAndrew Fields in an email.

"Although this group showed some decline in July (after several months of increases), it did not account for the bulk of the declines in public administration in July. Most of the declines were at the local, municipal and regional public administration level," he wrote.

Ontario lost 36,100 jobs last month. Newfoundland and Labrador saw a smalleremployment decline, while employment rose by 12,100 in British Columbia. B.C. now has the lowest unemployment rate in the country, at 5.6 per cent.

• Alberta unemployment rises to 8.6%, highest rate since 1994

Alberta, on the other hand, saw its unemployment rate rise to a 22-year highof 8.6 per cent as more Albertans were looking for work.

"The driving regional story for more than a year has been the outsized strength in B.C. and the pronounced weakness in Alberta, and the latest job numbers simply reinforced that trend," said BMO chief economist Douglas Porter.

"Only three provinces [B.C., New Brunswick and Manitoba] posted job gains, yet another sign that underlying growth is struggling," he said.