The Canadian economy added more jobs than expected with a net total of 39,900 jobs in August and the unemployment rate remained at 5.5%, according to official data released on Friday. This is indicative of a sign of underlying strength despite high interest rates.
Analysts had forecast a net addition of 15,000 jobs and the unemployment rate would rise slightly to 5.6% from July.
Statistics Canada said full-time employment increased by 32,200 jobs while part-time employment posted a more modest increase of 7,800.
The labor market has shown resilience despite the Bank of Canada raising overnight rates 10 times since March 2022 to stabilize the economy. Average monthly job growth was 25,000 over the year.
Average hourly wages for permanent workers, a figure closely watched by the central bank, rose by 5.2% from August 2022 compared to an annual increase of 5.0% in July.
The Bank of Canada has repeatedly voiced concerns that it will be difficult to fully control inflation if wages remain on the current pattern of rising between 4% and 5% annually. The Bank of Canada did not comment much on Wednesday but said on Thursday that it may need to tighten monetary policy further. The next rate announcement will be made on October 25.
Employment in the goods sector fell by 2,500 net jobs in August, mainly in manufacturing, while the services sector gained 42,400 net jobs, mostly in professional, scientific, and technical services.
