Canada added 40,000 jobs in August but it added 100,000 more people, too

Canada's economy added 39,900 jobs last month, about twice as many as expected, but also only about half as many as would be needed to keep up with population growth.

Statistics Canada reported Friday that while the economy added jobs, the country also added about 103,000 new people. So despite the mini-surge, the employment rate the percentage of adults that have a job, compared to the working-aged population actually declined by 0.1 percentage points, to 61.9 per cent.

By sector, theprofessional, scientific and technical services category was a source of strength, adding 52,000 positions. Construction added 34,000 jobs. On the flip side, the education sector lost 44,000 jobs and manufacturing shrank by 30,000.

Most of the jobs were of the self-employment variety, which expanded by 50,000 positions. The public sector grew by 13,000 jobs while the private sector actually contracted by 23,000 jobs.

• This week Cross Country Checkup wants to know ifit is fair to increase immigration when housing is scarce? What's been your experience immigrating to Canada? Fill out the details onthis formand send us your stories.

Economists had been expecting the economy to addabout 20,000 jobs, and a few were even calling for a decline, which would have been the second contraction in a row in the job market.

So far this year, Canada's job market has added about 174,000 new positions, or on averageabout 25,000 new jobs per month.

But the number of working-ageadults has gone up by about three times that, with Canada's population gaining onaverage83,000 people aged 15 or older every month.

Doug Porter, an economist with Bank of Montreal, says the steady stream of more than 800,000 new people who've come to Canada in the past year is the biggest single factor driving the job market right now.

"Canada now needs a steady flow of jobs just to match raging population growth," he said. "Thus, it's not inconsistent to see a sturdy monthly gain of 40,000 jobs and still conclude that the market is slightly easing."

Speaking to a business audience in Calgary on Thursday, Bank of Canada governor Tiff Macklemsaid the central bank has noted that even in months when the economy adds jobs, they're not coming at a faster pace than population growth,which means they aren't making theinflation fight harder.

"What that suggests is that thesupply of workers is growing more than the demand for workers," Macklem said. "So supply is catching up with demand, and those pressures are easing."

Brendon Bernard, a senior economist at job search siteIndeed.com, says that Canada's surging population is having an impact on bothsides of the inflationary ledger.

"There are some key areas where population growth is relatively inflationary, especially in the housing marketit pushes up demand for housing and rent," he toldCBC News.

"On the flip side, though, it does mean greater labour supply, so that could mean a little softer pressure on wages and the prices of other services."

In net terms, he saidhe thinks the influx inimmigration isn't having much impact either way on overall inflation, but it's certainly resetting the definition of what constitutes a healthy job market.

"The Canadian population is growing really quickly and what that does is it raises the ceilingon how many jobs potentially could be added a month.But it also raises the floor of what we should consider a strong report," he said.

"What constitutes a good jobs report is different today than it was in the past, just because the underlying population is growing."