According to Statistics Canada, the economy created 90,000 jobs in August, the third consecutive monthly increase.
The unemployment rate fell to 7.1% for the month from 7.5% in July, bringing the rate to its lowest level since the start of the COVID-19 pandemic last year.
The announcement exceeded consensus expectations and came after even larger gains in the previous two months, Royce Mendes, CIBC economist, wrote in a research note. But he also pointed out some problems.
“There were a few flies in the ointment, with hours worked essentially unchanged,” he wrote.
Mendes also reported that fewer people are trying to find jobs.
“Despite the low number of new COVID cases and the reopening of the economy during the month, the low turnout suggests that potential workers were still hesitant to return to the workforce.”
Gains were concentrated in full-time work and the hard-hit service sector, led by gains in accommodation and food services.
Gains in the service sector, according to Statistics Canada, brought employment there to pre-pandemic levels for the first time, although some areas still lag behind, such as retail and food services.
The agency says overall employment is less than 156,000 jobs, or 0.8%, from the level recorded in February 2020, before the start of the pandemic.
This is the closest the country has managed to recover all the jobs lost in the first wave of COVID-19.