Canada's Labor Market Slips into Reverse Gear
Canada's labor market took a hit in August, shedding 41,700 jobs after economists had forecasted an increase of around 15,000. The unemployment rate remained steady at 6.4%, unchanged from July's two-year low.
The damage was concentrated in full-time work, which accounts for the majority of household income and spending power. Full-time positions dropped by 35,900, while part-time roles fell by a relatively modest 5,800.
Manufacturing was an exception to this trend, posting the only significant sectoral increase. However, wages remained stagnant, with average hourly pay for permanent employees growing just 2.0% year-over-year, missing both the 3.0% consensus forecast and the prior month's 3.0% reading.
The ongoing trade tensions with the US continue to weigh on business confidence and hiring decisions in Canada. The data captures a snapshot of mid-summer economic conditions, but it presents a troubling signal for the Bank of Canada as they consider monetary policy deliberations.