Canada gains more jobs than expected in August, wage growth accelerates
By David Ljunggren and Steve Scherer
OTTAWA (Reuters) -Canada's economy added almost three times the number of jobs expected in August and wage growth accelerated, data showed on Friday, a sign of underlying strength despite high interest rates.
Canada created 39,900 jobs, Statistics Canada said, compared with a median forecast for a gain of 15,000. The unemployment rate remained at 5.5%.
Full-time positions grew by 32,200 while part-time jobs posted a more modest gain of 7,800.
The labor market has been resilient even as the Bank of Canada (BoC) raised its key overnight rate 10 times since March 2022 to cool the economy. Monthly employment growth is averaging 25,000 so far this year.
The average hourly wage for permanent employees, a figure the central bank watches closely, rose by 5.2% from August 2022 compared to a year-on-year increase of 5.0% in July.
The BoC has repeatedly expressed concern that it will be hard to fully curb inflation if wages maintain their current patterns of rising between 4% and 5% annually.
«Showing that uptick on a year-over-year basis was not anticipated and I think that will not give the Bank of Canada a great degree of comfort,» said Andrew Kelvin, senior economist at CIBC Capital Markets.
The central bank stayed on the sidelines on Wednesday but said on Thursday it might have to tighten monetary policy further. It had hiked rates by a quarter of a percentage point in both June and July.
Money markets see a 44% chance of another BoC rate hike by year-end, up from 36% before the data were published.
«The Canadian labor market bounced back in a big way in August,» said Royce Mendes, head of macro strategy at Desjardins Group. «This report alone won't make the Bank of Canada regret holding
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