Canada’s labor market lost 41,700 jobs in August, reversing July’s gain of 75,100 and missing expectations for a 15,000 increase. The unemployment rate held at a two-year low of 6.4% as participation fell to 65.0% from 65.1%, while average hourly pay for permanent employees rose 2.0% from a year earlier, slowing from 3.0% in July. Canada’s 10-year government bond yield eased to 3.77% after touching a more than two-year high of 3.80% on September 3. The weak hiring data could support a more dovish Bank of Canada stance after the central bank held its key policy rate at 2.25% in September. The Bank cited increased inflation risks and greater growth uncertainty from new tariffs, while Governor Macklem said policymakers were prepared to raise rates if inflation remained elevated. The Canadian dollar weakened to around C$1.39 per US dollar after US payrolls rose 162,000, about three times the consensus estimate, strengthening expectations for a September Federal Reserve rate increase. The S&P/TSX Composite Index fell 0.3% to close at 36,514 on Friday, as stronger US rate expectations, lower gold prices and weakness in technology shares pressured Canadian equities.