AFP, Ottawa

Canada’s unemployment rate rose to 6.6 percent in August, its highest level since May 2017 -- excluding peak Covid-19 pandemic years -- the national statistical agency said Friday.

The result, an increase from 6.4 percent in July, was despite little change in the total number of jobs for a fourth month in a row.

Statistics Canada noted that the jobless rate has been generally trending up since April 2023.

Analysts said this is likely to add pressure on the Bank of Canada to continue lowering interest rates, after three successive cuts, in order to prevent the economy from stalling as it seeks to throttle inflation.

“With population growth strong once again and labour force participation rebounding, hiring in August wasn’t enough to keep the unemployment rate from rising two ticks,” Desjardins’ Royce Mendes commented in a research note.

Overall, he said, the data points to the economy “continuing to stagnate in the third quarter.”

Desjardins pegged economic growth at just one percent from July to September versus the central bank forecast of 2.8 percent.

“This was a slightly softer than expected (jobs) report consistent with continued steady interest rate cuts from the Bank of Canada,” concluded CIBC analyst Andrew Grantham.