Canada's economy lost 4,700 jobs in October and the unemployment rate climbed to 6.7% from 6.5%, Statistics Canada said on Friday, a third straight soft labour report that arrived about a week after the Bank of Canada raised interest rates for the first time in more than three years.

Economists had expected hiring to resume. A Reuters poll had forecast a gain of 13,600 jobs, according to The Canadian Press, while TD Economics put the consensus at 15,000. For investors in Asia, the numbers matter because Canada sells energy, grains and metals to the region, and the path of Canadian rates feeds into the Canadian dollar and the yields on Canadian bonds held by overseas investors.

The October loss followed declines of 68,000 jobs in September and 42,000 in August. Over 12 months, employment was up only 17,000, or 0.1%, to about 21.1 million, the statistics agency said. The employment rate slipped to 60.5%, its third monthly decline in a row.

Private-sector hiring falls in Canada

The mix of the report was weaker than the headline. Private-sector employees fell by 53,000, or 0.4%, the first decline since February. A 50,000 rise in public-sector employment, which followed four monthly drops totaling 148,000, kept the overall figure close to flat.

Wholesale and retail trade shed 29,000 jobs in the month and 113,000 over the past year, Statistics Canada said. Construction added 16,000 positions and educational services added 15,000. Full-time employment fell by 18,100, according to TD Economics.

Andrew Grantham, an economist at CIBC, told The Canadian Press that softness was appearing beyond the industries most exposed to U.S. trade policy. Sneha Puri of the job site Indeed called the release "a disappointment," though she noted that Indeed's Canadian job postings ticked up at the end of October.

The job-finding rate, the share of people unemployed in September who had found work by October, dropped to 18.9% from 19.8% a year earlier. Long-term joblessness, defined as 27 weeks or more, accounted for 23.7% of the roughly 1.5 million unemployed, up from 21.5%. Youth unemployment rose 0.7 percentage point to 13.7%.

Regional numbers split along resource lines. Alberta, the center of Canada's oil and gas industry, lost 24,000 jobs and its unemployment rate jumped 0.9 point to 7.3%. British Columbia, Canada's Pacific gateway province, added 12,000 jobs, with unemployment at 6.3%. Ontario's jobless rate rose 0.3 point to 7.3%.

Bank of Canada faces a softer labour market

The Bank of Canada raised its policy rate by a quarter point to 2.5% about a week before the jobs report, saying it wanted to get ahead of inflation pressure from the global energy shock. Friday's data complicate that argument.

Average hourly wages rose 2.2% from a year earlier to C$37.89, slowing from 2.3% in September. Andrew Hencic, a senior economist at TD Economics, wrote that weak pay growth is "a signal that labour demand is not yet outstripping supply," and that the key question is whether companies can pass on higher costs when wages are barely rising. He said markets cut the odds of a January rate increase to 77% from 96% after the data.

Thomas Ryan of Capital Economics said the higher jobless rate and slow wage growth point to slack in the job market that should discourage further tightening, though he still expects at most two more precautionary increases, The Canadian Press reported. Grantham said the bank could hold in December if weak hiring and falling oil prices persist.

Financial markets priced a 35% chance of another quarter-point move at the bank's Dec. 9 decision, its last of the year, according to LSEG data cited by The Canadian Press.

What it means for Asia-facing trade

A less hawkish Bank of Canada would take some support away from the Canadian dollar. That matters for Asian buyers of Canadian commodities, which are generally priced in U.S. dollars but produced with Canadian-dollar costs, and for Canadian exporters that have leaned on Asian demand this year, including canola shippers whose sales to China rose sharply.

The labour market's next test comes with the November Labour Force Survey, due before the Dec. 9 rate decision. Puri said a run of stronger reports would be needed to show October was a pause rather than the start of renewed cooling.