Canada loses 41,700 jobs in August, far missing 15,000 gain forecast

• July employment change: 75.1K

Figures for August have been released: 

• Employment change: -41.7K versus a consensus of +15.0K; prior reading +75.1K
• Unemployment rate: 6.4%, in line with forecasts and unchanged from the prior month
• Full-time employment change: -35.9K, compared with +38.6K previously
• Part-time employment change: -5.8K, versus +36.6K beforehand
• Participation rate: 65.0%, down from 65.1%
• Average hourly wages for permanent staff: up 2.0% year on year, below the 3.0% estimate and the prior month's 3.0%

The August employment data from Canada came in softer than anticipated. Payrolls dropped by 41.7K, sharply under the projected increase of 15.0K, as both full-time and part-time roles saw cuts. Full-time positions fell by 35.9K and part-time roles decreased by 5.8K.

Even with the drop in hiring, the jobless rate held steady at 6.4%, meeting expectations. That outcome was partially due to the participation rate edging down to 65.0% from 65.1%, indicating fewer individuals were searching for work.

Wage growth also decelerated noticeably. Permanent employees' average hourly earnings climbed only 2.0% compared with a year earlier, slowing from 3.0% in the previous month and missing the 3.0% forecast. Overall, the report signals a softening Canadian labour market, characterised by declining employment, weaker labour-force involvement and easing wage pressures. That mix should lessen the urgency for the Bank of Canada to tighten policy and represents a negative factor for the Canadian dollar.  With the US jobs data pointing to greater strength, USD/CAD is trending higher.