Canadian Economy Loses 51,600 Jobs, Led by Plunge in Ontario
(Bloomberg) -- Canada’s economy unexpectedly lost 51,600 jobs, with wage gains slowing and Ontario recording its biggest employment drop in nearly a decade, removing any urgency for the central bank to accelerate rate hikes.
The nation’s largest province lost 80,100 jobs in August, all part-time, the biggest decline for Ontario since 2009. Nationally, the economy lost 92,000 part-time workers, though a 40,400 gain in full-time employment is one sign the labor market is firmer than the headline number suggests.
The data released Friday by Statistics Canada in Ottawa reversed strong employment gains made earlier this summer, including sharp increases in Ontario. But the overall picture is one of a labor market gearing down markedly from last year and an economy not at risk of overheating. That reinforces expectations the Bank of Canada will take a cautious approach to increasing borrowing costs.
The jobs numbers are “consistent with a gradual rate hike path and really not a whole lot of urgency,” said Robert Kavcic, a senior economist at BMO Capital Markets.
The Canadian dollar slipped after the jobs report, down as much as 0.3 percent to C$1.3182 per U.S. dollar. The currency rose as much as 0.4 percent Thursday after Bank of Canada Senior Deputy Governor Carolyn Wilkins said the central bank’s top officials debated this week whether to accelerate the pace of potential interest rate hikes, before finally choosing to stick to their current “gradual” path.
The Bank of Canada has raised interest rates four times since mid-2017 to keep inflation from moving permanently beyond its 2 percent target, and indicated it will need to make additional hikes to keep price gains from accelerating because the economy is roughly at capacity.
So far in 2018, the economy has shed 14,600 jobs, but the number masks a 97,300 gain in full-time jobs. Part-time employment is down by 111,900 this year.
The net loss in August -- which was the second largest monthly decline since the last recession -- drove the unemployment rate to 6 percent, from 5.8 percent a month earlier, while wage gains decelerated to their slowest this year. However, the jobless rate still remains near four-decade lows.
Economists had expected a gain of 5,000 jobs and an unemployment rate of 5.9 percent, according to the median estimate in a Bloomberg survey.