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, self-employed workers led the decline.
The figures surprised economists, who expected the economy to provide about 20,000 jobs during the month.
The services sector lost 76,000 jobs during the month, erasing the gains made earlier this year. These lost jobs were partially offset by a 33,000 increase in jobs in the goods-producing industries.
The biggest drop in employment occurred in retail, which lost 58,000 jobs.
“Data for the coming months will shed light on whether employment in this industry may be affected by any changing consumer behavior associated with inflation and the ability of Canadians to cope with day-to-day spending,” StatsCan said. .
Despite the decline, the unemployment rate dropped to an all-time low of 4.9 percent because fewer people were looking for work.
The number of people now considered officially unemployed has dropped 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, dropped to 185,000. It is the same level that was before the pandemic.
Despite general job losses, wage growth picked up, and average hourly wages rose to $ 31.24. This is an increase of 5.2% compared to the average salary of this period last year, which is the fastest annual increase in average salaries since 1998.
But it is still below the official inflation rate of 7.7%.
Stephen Brown, an economist at Capital Economics, said that while the figures came as a surprise, they are unlikely to change their minds about the Bank of Canada when it comes to raising interest rates.
“Since seasonal distortions are likely to explain the fall in employment, the Bank is likely to focus more on increasing labor market rigidity and the associated recovery in wage growth,” Brown said.