OTTAWA (Reuters) – Canada’s economy gained a much greater than expected net 39,900 jobs in August and the unemployment rate remained at 5.5%, official data showed on Friday, a sign of underlying strength despite high rates.
Analysts polled by Reuters had forecast a net gain of 15,000 jobs and for the unemployment rate to edge up to 5.6% from July.
Statistics Canada said full-time positions grew by 32,200 jobs while part-time jobs posted a more modest gain of 7,800.
The labor market has been resilient even as the Bank of Canada raised its key overnight rate 10 times since March 2022 to cool the economy. Monthly employment growth is averaging 25,000 so far this year.
“Always a little bit wary about putting too much weight on individual jobs numbers, but this certainly comes down on the hawkish side of the scale and it will keep the Bank of Canada on pins and needles ahead of that October meeting,” said Andrew Kelvin, chief Canada strategist at TD Securities.
The average hourly wage for permanent employees, a figure the central bank watches closely, rose by 5.2% from August 2022 compared to a year-on-year increase of 5.0% in July.
The Bank of Canada has repeatedly expressed concern that it will be hard to fully curb inflation if wages maintain their current patterns of rising between 4% and 5% annually.
The bank stayed on the sidelines on Wednesday but said on Thursday it might have to tighten monetary policy further. Its next rate announcement is due on Oct. 25.
Employment in the goods sector fell by a net 2,500 jobs in August, largely in manufacturing, while the services sector gained a net 42,400 jobs, mostly in professional, scientific and technical services.
Source: Economy - investing.com
