Unemployment rate steady at 5.5% in August as economy adds 40K jobs: StatCan

Canada's labour market added 40,000 jobs last month and the unemployment rate held steady as economists watch for more signs of a slowdown.

Statistics Canada reported Friday (Sept. 8) the unemployment rate held at 5.5% in August, ending a three-month streak of rising unemployment.

The federal agency says Canada's strong population growth means higher monthly job gains are needed to keep the unemployment rate steady.

The monthly labour force surveys show Canada's population has been growing by an average of 81,000 people every month this year. That pace of growth requires job gains of about 50,000 each month to keep the unemployment rate steady, said Statistics Canada.

Employment increased in professional, scientific and technical services as well as construction, meanwhile, jobs were shed in education services and manufacturing.

READ: Economy contracts in second quarter as higher interest rates take hold

The latest jobs report comes days after the Bank of Canada opted to hold its key interest rate steady at 5%.

The central bank's decision was prompted by recent data that shows the economy is taking a turn: the latest gross domestic product reading showed the economy shrank in the second quarter.

The labour market has also eased in recent months as job vacancies fall and the unemployment rate sits higher.

But the central bank is still concerned about high inflation and wants more confirmation that growth is stalling, including in the labour market.

Friday's job report does little to ease the central bank's wage growth concerns, as wages rose 4.9% on an annual basis, down from 5% the previous month.

However, economists expect the slowing economic conditions to eventually translate into small wage increases for workers.