Canada’s labour market weakened in August, with employers cutting 42,000 jobs, according to Statistics Canada. The drop surprised economists, who had expected a fourth straight month of job gains.
The unemployment rate stayed at 6.4 per cent.
Public-sector employment fell by 20,000 jobs, marking a third straight monthly decline. Private-sector employment was little changed.
Manufacturing was a bright spot, adding 22,000 jobs. Public administration, natural resources and utilities all recorded declines.
Quebec lost 19,000 jobs, while Ontario shed 18,000.
Average hourly wage growth also slowed to two per cent in August, down from 2.8 per cent in July and 3.3 per cent in June. It was the slowest pace in nearly nine years.
Economists had expected Canada to add about 15,000 jobs. The latest report ends a strong run of job gains, with 181,000 positions added between April and July, including 75,000 in July.
The weaker job numbers come as Canada faces growing trade tensions with the United States. U.S. tariffs on Canadian goods are putting pressure on businesses and industries that rely on exports.
The federal government recently announced $7.5 billion in additional support for workers and businesses affected by the trade dispute.
Meanwhile, the U.S. added 162,000 jobs in August, while its unemployment rate remained at 4.1 per cent.
Many economists expect the Bank of Canada to keep its key interest rate at 2.25 per cent for the rest of the year.
