The Canadian economy added 11,300 jobs in July — enough to drop the country's unemployment rate to a 33-year low of 6.0 per cent.
The net job creation numbers came in below the 20,000 figure some analysts had been expecting.
The biggest employment increase came in professional, scientific and technical services, where 25,200 jobs were added. Trade, transportation and warehousing also saw job growth.
The biggest job loss came in educational services, where more than 57,000 jobs vanished. "The large drop in educational services in July was spread across several provinces and was concentrated among teachers and educational assistants in primary and secondary schools," Statistics Canada said.
Manufacturing — a recent weak spot — came out a big winner in July, as 19,600 factory jobs were added to the nation's payrolls. But that still left the country with 72,000 fewer manufacturing jobs than it had at the end of 2006.
Alberta was one of only two provinces to record an increase in employment. The 13,600 jobs added in that province pushed its jobless rate down by half a percentage point to 3.3 per cent.
Ontario was the only other province to record job growth, as it added 11,400 jobs. A stronger manufacturing sector was the main reason behind that.
The other eight provinces had minor job losses.
Job growth was concentrated in the private sector, as public sector employment actually fell by 19,500 last month.
Wage increases again were running far ahead of the cost of living. Canadian workers made 3.7 per cent more per hour in July than they did a year earlier, easily surpassing the 2.2 per cent increase in the consumer price index over that time.
"Under normal circumstances, this report would give the Bank of Canada a blinding green light to hike rates again next month, especially with wage pressures mounting," said BMO Capital Markets economist Doug Porter in a morning commentary.
"Alas, these are not exactly normal times, with the bank's decision at least partly dependent on financial markets returning to some semblance of calm," he said.
RBC assistant chief economist Paul Ferley said he expects a rate hike of a quarter of a percentage point in September, a similar hike in October and a third increase in early 2008. But he said that forecast "assumes that recent financial market volatility will abate."
Canadian Labour Congress president Ken Georgetti hopes further rate increases don't happen.
"There's certainly no reason here to justify another announcement from the Bank of Canada that interest rates are going up," he said. "Too many good jobs with good wages would be put at risk."
Higher interest rates tend to boost the Canadian dollar. The CLC has blamed the high loonie for the loss of more than 250,000 manufacturing jobs since 2002.
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