Canada’s job market experienced a setback in August, shedding 42,000 positions, according to Statistics Canada’s report on Friday. This decline came as a surprise to some analysts who had anticipated a fourth consecutive month of job gains since May. The unemployment rate remained unchanged at 6.4% last month.

The data from the latest Labour Force Survey revealed a decrease of 20,000 jobs in the public sector for the third consecutive month, while the private sector saw minimal changes. In a positive turn, the manufacturing industry added 22,000 jobs in August, although sectors such as public administration, natural resources, and utilities reported declines.

CIBC’s chief economist, Andrew Grantham, noted that manufacturing was the only sector with a significant employment increase in August. The overall economic indicators suggest a slowdown in the economy for the third quarter, following a robust second quarter, amid heightened uncertainty surrounding U.S. trade.

Quebec and Ontario were the most affected regions, losing 19,000 and 18,000 jobs, respectively. Bank of Montreal’s chief economist, Douglas Porter, mentioned that after a series of strong job reports, a softer outcome was expected, indicating a plausible reality check for Canada’s job market.

Statistics Canada reported that the average hourly wage growth in August hit a nearly nine-year low, with a two percent increase on an annualized basis, down from 2.8% in July and 3.3% in June.

The job market report reflects concerns over the ongoing trade tensions between Canada and the United States. The recent implementation of tariffs by both countries on each other’s products has intensified economic challenges for various industries. In response, the Canadian government introduced a $7.5-billion economic relief program for affected workers and businesses, supplementing the prior $25 billion tariff support over the past year and a half.

Despite the setback in Canada, the U.S. labor market showed resilience in August, adding 162,000 jobs, as per the U.S. Labor Department’s report. President Trump lauded the job numbers, emphasizing the need for a rate cut by the Federal Reserve to further boost economic growth. Meanwhile, Canadian economists anticipate the Bank of Canada to maintain its policy rate at 2.25% for the remainder of the year.