By Paul Vieira

OTTAWA--Statistics Canada said Friday it was forced to restate its July employment report because it failed to count certain people as being in the labor force, which led to an overestimation in the number of full-time job losses in the month.

In a statement accompanying the data release, Statistics Canada offered a bit more detail on why it was forced to expunge July employment data from its Web site and issue a new July report. It said an internal review of how this unfolded and how the error went undetected continues, and its findings will be published within the next two weeks.

The original July jobs report, issued Aug. 8, said Canada added a meager 200 jobs in the month. The restated report, released Friday, said the country created41,700, or more than double market expectations.

"I am fully confident in the integrity of the labor force survey," said Wayne Smith, head of Statistics Canada. "This was an isolated incident. Statistics Canada does and will continue to publish high-quality and relevant statistical information on all aspects of the Canadian economy and society."

In the statement, Statistics Canada said a scheduled upgrade of its system coinciding with the July jobs report failed to update one program. This was a "human error," the data agency said, adding it only affected results linked to the July release.

As a result, certain survey respondents that should have been classified as employed were counted as not being in the labor force. This, in turn, led Statistics Canada to estimate there was a decline of 59,700 full-time jobs in the month. The revised data, which corrected the processing error, indicated the decline was closer to 18,000 full-time positions.

The data agency's employment report is based on a survey of 56,000 households, generally done in the span of a week. The July survey was conducted between July 13 and 19. Because the estimates are based on a sampling, Statistics Canada says the monthly estimates will show more variability than trends observed over longer timeframes.

Write to Paul Vieira at paul.vieira@wsj.com

(END) Dow Jones Newswires

August 15, 2014 09:01 ET (13:01 GMT)

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