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CESO, ME – JUNE 24: Some companies are complaining of labor shortages due to workers’ choice of government benefits (Photo by staff at Derek Davis / Portland Press Herald via Getty Images)

The Canadian economy created 94,000 jobs in July as restrictions eased.

According to Statistics Canada, the unemployment rate fell 0.3 percentage points to 7.5 percent.

The gain builds on the 231,000 jobs created in June, which were dragged down by part-time jobs. But July’s earnings were mostly full-time work (83,000) for the first increase since March 2021.

The gains were entirely made in the private sector, with accommodation and food services in the lead with 35,000 jobs.

After two strong months, the Canadian labor market is 1.3% below the level before the pandemic of February 2020. This means that 246,000 people remain unemployed.

“Earnings are expected to slow from here, with many employers reporting labor shortages due to generous government support, concerns over hiring Covid in high-contact workplaces and tasks child care, ”said Royce Mendes, senior economist at CIBC.

Mendes says a lower labor force participation rate potentially reflects labor shortages that some companies are complaining about.

The total number of hours worked rose 1.3 percent in July, about 2.7 percent below the pre-pandemic level.

Young people aged 15 to 24 and core women aged 25 to 54 accounted for the bulk of the gains. All the gains were recorded in the service-producing sectors.

Employment increased in Ontario, Manitoba, Nova Scotia and Prince Edward Island.

The share of Canadians working from home, who worked at least half of their usual hours, fell two percentage points to 25.8% in July, the lowest level since October 2020.

The Canadian Chamber of Commerce says headlines look good at first glance, but don’t tell the whole story.

“It is not surprising that much of the attention is focused on the jobs regained after a year of decimation and stagnation in the labor market,” he said.

“On the surface, it appears to be a smooth transition as regions reach different stages of reopening. Just below the surface, however, the proverbial duck’s feet struggle to progress amid swirling undercurrents.”

The United States created 943,000 jobs in July and the unemployment rate fell to 5.4 percent.

Jessy Bains is a senior reporter at Yahoo Finance Canada. Follow him on twitter @jessysbains.

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