Canadian employment levels unexpectedly fell for a third straight month in August and the jobless rate jumped, a potential signal interest-rate hikes have started to cool the tight labour market. The economy shed 39,700 jobs last month, Statistics Canada reported on Friday in Ottawa, a surprise negative reading compared to the 15,000 gain anticipated by economists in a Bloomberg survey.
The jobless rate rose to 5.4 per cent from record lows of 4.9 per cent 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 the country’s labour force is re-balancing as the Bank of Canada’s aggressive rate hikes start to cool economic growth and slow demand.
The additional job searchers may likewise ease wage growth as the labour supply expands. Embedded Image The Canadian dollar’s gain weakened slightly after the news, trading up 0.5 per cent to US$1.303 at 8:40 a.m. in Toronto after earlier climbing as much as 0.8 per cent. Yields on Canadian 10-year bonds extended declines, falling 9.6 basis points to 3.1 per cent.
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