Jobs report sends mixed signals

The latest job numbers are in, and they’re sending more mixed signals than a crush who likes all of your Instagram stories but won’t answer any of your texts.

Driving the news: 39,900 net new jobs were added to the economy in August, doubling expectations and keeping the unemployment rate steady at 5.5%, Stats Canada reported.

  • Wage growth was also strong, coming in at 5.2% compared to August of last year and ticking up from July’s year-over-year gain of 5%.

Yes, but: Not everything is as rosy as those headline numbers suggest. 

  • More new jobs were added than expected, but the population grew by 100,000 over the same time period, meaning the employment rate actually fell slightly.

  • Wages grew, but productivity is falling, meaning that those pay raises are happening because of inflation, which may trouble the Bank of Canada.

Why it matters: A jobs report may make life difficult for forecasters, but it’s not bad news for the economy—a not-too-hot, not-too-cold labour market is exactly what’s needed to achieve a “soft landing” in which inflation comes down without a serious, job-killing recession.—TS