Business

Winnipeg Free Press - PRINT EDITION

No new stimulus, says PM

Unemployment rises as part-time jobs replace full-time positions

By: Julian Beltrame

Posted: 08/7/2010 1:00 AM | Comments: 0 (including replies)

OTTAWA -- Prime Minister Stephen Harper has ruled out a second round of government stimulus -- for now -- in reaction to new employment figures which show Canada lost 139,000 full-time jobs last month and the unemployment rate rose to eight per cent.

The stinging report -- whose blow was softened by the pickup of 129,700 part-time workers that left the net loss at a modest 9,300 -- was the first time this year employment fell back. Many full-time positions were likely downgraded into part-time as employers slowed production, analysts said.

Still, the losses resulted in the first increase in the unemployment rate in 11 months to eight per cent, from 7.9 per cent in June. That's about two percentage points higher than before the start of the 2008-2009 recession.

The Canadian dollar was down 1.08 cents to 97.29 cents US in the wake of the report.

The news was no better in the United States, where 131,000 net jobs vanished in the month, although the weakness was skewed by the elimination of tens of thousands of temporary census workers.

Manitoba's unemployment rate, meanwhile, climbed to its highest level in seven months after the local economy shed 100 jobs in July and 1,700 more job-seekers entered the provincial labour force.

Statistics Canada said the net job loss and the influx of new job-seekers boosted the number of unemployed workers in the province to 36,800 (on a seasonally-adjusted basis) from 35,000 in June.

That drove up the unemployment rate to 5.6 per cent from 5.3 per cent in June.

That's its highest level since last December when it was 5.8 per cent. But it's still the second-lowest provincial jobless rate after Saskatchewan's 5.1 per cent.

University of Manitoba economics professor John McCallum said one of the worrisome aspects of last month's employment report was the loss of 3,400 full-time positions in Manitoba. He said it appears most of them were replaced with part-time positions, since the province gained 3,300 part-time jobs during the month, leaving it with the net loss of 100 jobs.

McCallum also said 10,700 of the 12,700 new jobs created in Manitoba over the past year were public-sector positions.

"Manitoba has a real job-creation problem in the private sector," he said."

But the Manitoba government said in a statement that 2,200 new private-sector jobs were created in July, while the public sector trimmed 2,300 positions.

It also said that since the start of the recession in 2008, Manitoba's private-sector job creation also has far exceeded the national average.

The Canadian economy has outperformed the United States and other countries during the recovery, mainly because of strength in public sector hiring, a solid housing and construction sector, and continued growth in resources and energy industries in the West.

However, with a slowdown in housing, higher consumer taxes in Ontario and B.C. and looming federal and provincial government spending restraints to cut deficits, the drags on the economy are starting to kick in.

Harper noted the Bank of Canada has been raising interest rates, saying that was an indication the government should be reducing the deficit. "But we will monitor these things," he added.

Starting last spring, Ottawa pumped about $47 billion into the economy through tax cuts, incentives and infrastructure spending, but that stimulus is set to expire early next year.

At a speech at the Couchiching conference in Orillia, Ont., Finance Minister Jim Flaherty estimated the boost added two percentage points to GDP growth in the last three quarters of 2009.

-- The Canadian Press, with files by Murray McNeill

Republished from the Winnipeg Free Press print edition August 7, 2010 B4

(You must be logged in to post your reaction)

Your reaction?

More Business

Undock

You can comment on most stories on winnipegfreepress.com. You can also agree or disagree with other comments. All you need to do is register and/or login and you can join the conversation and give your feedback.

The Winnipeg Free Press does not necessarily endorse any of the views posted. By submitting your comment, you agree to our Terms and Conditions. These terms were revised effective April 16, 2010; View the changes. New to commenting? Check out our Frequently Asked Questions.