TORONTO - Strength in the basic materials sector helped Canada’s main stock index finish more than 130 points higher on Friday, while U.S. markets were down and investors pored over employment data from both sides of the border.Â
Wall Street was questioning whether the U.S. job market has slowed by just enough to get the U.S. Federal Reserve to cut interest rates and help the economy, or by so much that a downturn may be on the way.
“The market was really anticipating these job numbers and the headlines weren’t great,” said Ryan Goulding, head of interest rates at Leith Wheeler Investment Counsel Ltd.Â
After rising to an early gain Friday, the S&P 500 erased it and fell 0.3% from the all-time high set the day before. The Dow Jones Industrial Average dropped 0.5%, and the Nasdaq composite was nearly flat. (Sept. 5, 2025)
AP Video“The U.S., if you include revisions, (was) pretty much flat on jobs, much below expectations. But then you look at the internals of that number — also not great.”Â
The S&P/TSX composite index was up 134.74 points at 29,050.63.
In New York, the Dow Jones industrial average was down 220.43 points at 45,400.86. The S&P 500 index was down 20.58 points at 6,481.50, while the Nasdaq composite was down 7.30 points at 21,700.39.
The U.S. Labor Department reported Friday that employers — companies, government agencies and non-profits — added just 22,000 jobs last month, down from 79,000 in July and well below the 80,000 economists had expected.
The disappointing numbers follow last month’s weaker-than-expected jobs update, along with other lacklustre reports in intervening weeks, and traders now are betting on a 100 per cent probability that the Fed will cut its main interest rate at its next meeting on Sept. 17, according to data from CME Group.Â
“You’ve seen the drag from tariffs, but that’s also spreading to other sectors as well. So it’s starting to seep into the rest of the economy, and jobs are always one I watch first,” Goulding said.Â
He said markets earlier this week were discussing the possibility of either a 25 basis point cut by the Fed in September or a rate hold. Now, Goulding said markets are either anticipating a 25 or 50 basis point cut.Â
“So the market is certainly responding to the number,” Goulding said.
Meanwhile, Statistics Canada reported Friday that the Canadian economy lost jobs for the second month in a row and the unemployment rate climbed to its highest level since May 2016, excluding the pandemic period.Â
The unemployment rate ticked up to 7.1 per cent in August as the economy lost 66,000 jobs for the month. The monthly jobs report comes after the July labour force survey that showed a loss of 41,000 jobs and an unemployment rate of 6.9 per cent.
Statistics Canada says the unemployment rate ticked up to 7.1 per cent in August as the economy lost 66,000 jobs for the month (Sept. 5, 2025)
The Canadian Press“In Canada, we had losses; those losses were broad-based, they’ve been out of the tariff-related sectors and are seeping into the other sectors of the economy,” Goulding said.Â
The Canadian dollar traded for 72.31 cents US, flat compared with Thursday.Â
The October crude oil contract was down US$1.61 at US$61.87 per barrel. The December gold contract was up US$46.60 at US$3,653.30 an ounce.
Wall Street is holding near its records on hopes that the U.S. job market has slowed enough to convince the Federal Reserve to cut interest rates soon to help the economy, but not so much that it brings a recession. (Sept. 5, 2025)
AP VideoThis report by The Canadian Press was first published Sept. 5, 2025.
— With files from The Associated Press.
Companies in this story: (TSX:GSPTSE, TSX:CADUSD)
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