Canada continued shedding jobs for a third month in a row in August as the unemployment rate shot up to 5.4 percent from a record low, the national statistical agency announced Friday.
Net employment declined by 40,000 while the jobless rate rose 0.5 percentage points from June and July. It was the first increase in the jobless rate in seven months, said Statistics Canada.
“That was far worse than the consensus forecast for a gain of 15,000 jobs and an unemployment rate of 5.0 percent,” Desjardins analyst Royce Mendes said in a research note.
Such protracted job losses usually point to a recession, he noted, but the total number of hours worked in August remained steady, “which means that the picture for GDP isn’t as bad as the headline number would suggest.”
As such, the central bank’s aggressive increasing of lending rates to tame soaring inflation is likely to slow, with just one more 25 basis point hike now expected next month, he said, following a 75 point hike this week to 3.25 percent.
According to Statistics Canada, August employment gains in various industries, including “other services” and professional, scientific, and technical services, were more than offset by declines in educational services and construction.
Average hourly wages of employees, meanwhile, rose 5.4 percent (+Can$1.60 to Can$31.33) year-over-year.
