Canada Loses 65,500 Jobs August Unemployment Hits 7.1%

Canada's economy unexpectedly lost 65,500 jobs in August, with most losses occurring in part-time positions, causing the unemployment rate to rise to 7.1%, the highest in over nine years outside the pandemic period. Employment declines were concentrated in the services sector, particularly professional, scientific, technical services, transportation, and warehousing, while the goods-producing sector saw slight growth. The labor market's weakness, marked by two consecutive months of significant job losses, has prompted expectations that the Bank of Canada may cut interest rates soon to support the economy. Despite some analysts noting that the job market's momentum shows gradual employment gains when averaged over several months, the latest data indicate clear softness and economic slack. Wage growth remains positive, with average hourly wages increasing by 3.6% year-over-year. Overall, the data suggest a challenging labor market environment that may influence monetary policy decisions aimed at economic recovery.