imageEconomyAug 07, 2020 10:30AM ET

By Julie Gordon and Kelsey Johnson

OTTAWA (Reuters) – Canada added 418,500 jobs in July, though the vast majority were part-time positions, and the unemployment rate fell to 10.9% as the economy continued to reopen from COVID-19 closures, Statistics Canada said on Friday.

Analysts in a Reuters poll had predicted a gain of 400,000 jobs and an unemployment rate of 11%, after record job gains in June as businesses across the country reopened.

“This is fairly close to what was expected compared to what we’ve seen in the last three months or so. We’re settling down after the easy increases in June,” said Douglas Porter, chief economist at the Bank of Montreal.

Employment in the goods-producing sector grew by 70,600 jobs, while the services sector grew by 347,900 positions. Part-time employment rose by 345,300 compared to 73,200 new full-time positions.

“Obviously you would rather see a more favorable full-time, part-time split,” said Andrew Kelvin, chief Canada strategist at TD Securities. “But that was also understandable given that it was the services sector driving the recovery.”

Many restaurants and hotels continue to operate below normal capacity and retail jobs are often part-time.

StatsCan also broke out employment numbers for minority population groups for the first time in July. It found that the unemployment rate was significantly higher for South Asian, Arab and Black Canadians than the average.

“We know that the best decisions are based on the most inclusive data, and our government will continue to monitor and track how this situation is impacting Canadians from all walks of life,” the government said in a statement.

In the United States, meanwhile, the gap in the jobless rate between whites and Blacks spread to its widest in more than five years, as employment growth slowed considerably amid a resurgence in new COVID-19 infections.

The Canadian dollar was trading 0.4% lower at 1.3360 to the greenback, or 74.85 U.S. cents, as rising trade tensions between Canada and the United States offset the job gains.

While the gains were better than expected, almost 2.2 million Canadians were jobless in July, around twice as many as in February. That means “there is still a long way to go,” said Ryan Brecht, senior economist at Action Economics.

“The Bank of Canada will remain in whatever-it-takes policy mode through 2021,” Brecht added. The central bank has said interest rates will remain low for at least two years.

If those who wanted to work but did not look for a job were included as unemployed in July, the adjusted unemployment rate would have been 13.8%, StatsCan said.

Canada adds more jobs than expected in July; most were part-time positions

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