Canada’s economy unexpectedly lost jobs for the second month in a row in July after a year-long boom, but analysts predicted that this would not stop the Bank of Canada from hiking interest rates to fight inflation.
CBC Canada is reporting that Statistics Canada said Friday that in July, 30,600 jobs were lost, coming on the heels of 43,000 jobs lost in June, while the unemployment rate stayed at a record low of 4.9 percent.
Economists had been expecting the economy to eke out a slight gain of about 15,000 jobs, but instead, the employment pool shrank.
Goods-producing companies actually added 23,000 jobs in July, but this positive number offset the loss of 53,000 jobs in the service sector.
Additionally, the Healthcare sector lost 22,000 positions. Burnout and job churn in the sector is becoming a major issue. More than 10 percent of all nurses called in sick at least once during the month, and more than 20 percent worked paid overtime to make up for it, the data Statistics Canada said.
Nursing vacancies in early 2022 were more than triple the level of five years earlier, Statistics Canada said.
Canada’s labor market remains exceptionally tight, with over one million job vacancies across the country. The unemployment rate is the lowest on record with comparable data going back to 1976.
Reuters notes that last month, the central bank surprised markets by raising its main interest rate by 100 basis points in a bid to tackle inflation. Derek Holt, vice president of capital markets economics at Scotiabank, said the July figures were disappointing but predicted Canada’s central bank would keep raising rates.
“I think they know full well that fighting inflation is going to break a few things, and one of them will be slowing job market momentum,” he said.
