The economy shed 28,100 jobs last month after months of consecutive job growth that put the squeeze on the labour market. While the province managed to add 3,700 part-time jobs, it lost 31,900 full-time jobs.
The province was already showing signs of tapping the brakes in July when it added a mere 500 jobs to the economy. That was down notably from the addition of 6,500 jobs in June.
B.C.’s unemployment rate took a hit in August as a result of those 28,100 lost jobs, expanding by 0.1 percentage point to a still very low rate of 4.8 per cent, which indicates the labour market remains quite tight.
Canada as a whole lost 39,700 jobs last month, while unemployment dropped 0.5 percentage points to 5.4 per cent.
"There is no debating that conditions are cooling quickly, with the pullback in construction a clear indication that rate hikes are beginning to bite,” BMO chief economist Douglas Porter said in a note, referring to the loss of 28,200 construction jobs nationally (B.C., in fact, added 2,300 construction jobs in August).
“However, the steady upward grind in wage growth [+5.4 per cent annually] and the stability in overall hours worked [+3.7 per cent annually] suggest that the Bank won't back down anytime soon.”
Retail/wholesale jobs in B.C. declined by 15,000 in August, followed by losses in the business, building and other support services bucket [-6,500 jobs] and educational services [-5,200 jobs]. The biggest gains came in the aforementioned construction industry and what Statistics Canada describes as the “other services” bucket [+5,500 jobs].
TD senior economist James Orlando acknowledged that the latest jobs numbers are likely to worry some people.
But “we'd argue that a slowing labour market is what is needed to ensure that this high inflation environment does not become entrenched,” he said in a note.
“The labour market is coming from levels of extreme tightness and has been due for some giveback. This is exactly what is currently playing out.”
The nation’s inflation rate reached 7.6 per cent last month, down from 8.1 per cent in July. But B.C.’s inflation rate went from 7.9 per cent to 8 per cent during that same period.
Statistics Canada will release August inflation data on Sept. 20.