Statistics Canada says Canada’s economy lost jobs for the first time since January last month, as sharp declines in the number of older workers as well as self-employed workers led to a decline.
The numbers were a surprise to economists who had expected the economy to add about 20,000 jobs in the month.
The services sector lost 76,000 jobs in the month, erasing gains made earlier in the year. These job losses were partially offset by a gain of 33,000 jobs in goods-producing industries.
The biggest drop in employment was in retail, where 58,000 jobs were lost.
“Data in the coming months will shed light on whether employment in this industry may be affected by changing consumer behavior related to inflation and the ability of Canadians to meet everyday expenses,” StatsCan said.
Despite the decline, unemployment fell to a record low of 4.9 percent as fewer people are looking for work.
The number of people now officially considered unemployed has dropped to one million in Canada.
Long-term unemployment, which the 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 before the pandemic.
Despite the underlying job losses, wage growth picked up, with average hourly wages increasing to $31.24. That’s up 5.2 percent from the average wage at this time last year, the fastest annual increase in average wages since 1998.
But it is still less than the official inflation rate of 7.7 percent.
Stephen Brown, an economist at Capital Economics, said that while the numbers are surprising, they are unlikely to change the Bank of Canada’s mind when it comes to raising interest rates.
“Given that seasonal distortions likely explain the decline in employment, the Bank is likely to focus more on the increased tightness in the labor market and the associated acceleration in wage growth,” Brown said.
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