The Associated Press August 6, 2010, 11:34AM ET

Canada's unemployment rate rises

Canada's strong economic recovery lost steam in July as the country dropped 139,000 full-time jobs and the unemployment rate edged up to 8 percent.

Statistics Canada said Friday the country lost a total of 9,300 jobs last month. The loss in full-time jobs was partly offset by a gain of 129,700 part-time jobs. The education sector lost 65,000 jobs as the summer holidays started. Finance, insurance, real estate and leasing sectors also suffered setbacks.

Avery Shenfeld, chief economist at CIBC World Markets, cautioned reading too much into the July report. He still expects Canada's central bank to raise interest rates again at their meeting next month.

"If we started to see a trend decline rather than a single month blip the Bank of Canada might have second thoughts about its forecast but one month does not a trend make," Shenfeld said.

In June, Canada became the first Group of Seven nation to raise interest rates since the global economic crisis. It raised rates again in July.

Economists had expected an increase of about 10,000 jobs in July following strong gains in recent months. The country added a near-record 93,000 jobs the previous month.

Canada has made up nearly all the jobs lost during the recession over the last year, but July is the first month this year the country has failed to create jobs.

The unemployment rate edged up one-tenth of a point to 8 percent, the first time the rate has risen in almost a year.

Canada withstood the global economic crisis better than most developed countries. There was no mortgage meltdown or subprime lending crisis in Canada where the financial sector is dominated by five large banks.

The Canadian dollar opened at US97.85 cents, down 0.52 of a cent from Thursday's close.


BW Mall - Sponsored Links

Buy a link now!