Canada’s economy shed jobs for a third month in a row, losing a net 39,700 full-time jobs in August, Statistics Canada has reported.
Employment in the goods producing sector fell by a net 13,900 jobs, mostly in construction. The services sector was down by a net 25,800 positions, largely in educational services.
The jobless rate rose to 5.4% from record lows of 4.9% in June and July due to the biggest increase in the number of unemployed since strict Covid measures were imposed in January.
The decrease in employment and higher jobless rate may be evidence that the country’s labor force is re-balancing following aggressive rate hikes from the Bank of Canada. The additional job searchers may likewise ease wage growth as the labor supply expands.
Canada is experiencing an economic slowdown following rate hikes which have tempered demand and reined in the largest inflation surge in decades.
The Canadian dollar’s gain lost some early gains following the news, trading up 0.5% to $1.303 at 8:40 am in Toronto having earlier climbed as much as 0.8%. Yields on Canadian 10-year bonds extended declines, falling 9.6 basis points to 3.1%.
“The weak headline figures may have the Bank of Canada questioning its apparent commitment to even higher interest rates,” Andrew Grantham, an economist at Canadian Imperial Bank of Commerce, said in a report to investors. “With one more labor force survey before the bank’s October meeting, it still seems likely that at least one more rate hike will be in store before a pause is seen.”