Canada’s economy losses jobs for two months in a row, but will it stop the central bank?

The latest report by Statistics Canada shows the national economy lost 30,600 jobs last month, following one more decline seen in June.

At the same time, Canada’s unemployment rate left unchanged at 4.9%.

The sectors of wholesale and retail trade, health care and social assistance, educational services reported a total loss of 53,000 jobs. The decline was offset by the goods-producing segments showing an increase of 23,000 jobs.

The drop in jobs was almost the same in both part-time and full-time work. However, the largest loss was reported among women aged 55+.

Last month, the overall participation rate was down by 0.2% to 64.7%, following a 0.4% decrease in June.

The results turned out to be weaker than expected. The average forecast of economists polled by Bloomberg was a gain of 15,000 jobs and an unemployment rate of 5.0%.

“This is an obviously a very noisy survey, particularly in the summer months, when the numbers fluctuate a lot. In my opinion, the most important thing is that the North American economies are slowing,” – says Philip Cross from Macdonald-Laurier Institute and a former chief economic analyst of Statistics Canada.

In addition to it, he warned that Canada’s real estate sector is vulnerable to the growing interest rates and may lag behind the U.S.

The BoC has tried to restore the national economy after months of skyrocketing inflation with aggressive interest rate increases. Friday’s jobs report will probably help the Bank make its next interest rate decision in September.

“Although today’s results brought even more uncertainties for policymakers, the central bank will likely keep focusing on the historic low unemployment rate and strong wage growth in order to justify one more non-standard rate increase at its next meeting,” – Andrew Grantham, a senior economist at CIBC Capital Markets.

The Bank follows its goal to reduce the inflation back to 2%.

“Evidence that the economy is slowing due to weaker demand and not to restrained supply, will lead to a pause in this rate hike cycle after the next rise,” – Grantham noted.

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