Despite job losses, unemployment rate falls to all-time low because fewer people were looking for work.
Statistics Canada says Canada’s economy lost jobs for the first time since January last month, as a sharp drop in the number of older as well as self-employed workers led the way down.
The numbers came as a surprise to economists, who had been expecting the economy to add about 20,000 jobs during the month.
The service sector lost 76,000 jobs during the month erasing gains made earlier in the year. Those lost jobs were partly offset by a gain of 33,000 jobs in goods-producing industries.
The largest decline in employment was in retail trade, which lost 58,000 jobs.
“Data over the coming months will shed light on whether employment in this industry might be impacted by any changing consumer behaviours associated with inflation and Canadians’ ability to meet day-to-day expenses,” StatsCan said.
Despite the decline, the jobless rate went down to a record low of 4.9 per cent, because fewer people were looking for work.
The number of people now officially considered to be unemployed fell to one million across Canada.
Long-term unemployment, which the data agency defines as people who have been out of work for at least six months, fell to 185,000. That’s the same level it was at before the pandemic.
Despite the headline job losses, wage growth picked up, with average hourly wages increasing to $31.24. That’s up by 5.2 per cent compared to the average wage this time last year, which is the fastest annual increase in average wages since 1998.
But it’s still less than the official inflation rate of 7.7 per cent.
Stephen Brown, an economist with Capital Economics, said while the numbers came as a surprise, they are unlikely to change the mind of the Bank of Canada when it comes to hiking interest rates.
“Given seasonal distortions probably explain the drop in employment, the Bank is likely to focus more on the increased tightness of the labour market and the associated pick-up in wage growth,” Brown said.
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