Canada’s economy unexpectedly shed jobs in July with the biggest decline seen in the services-producing sector while the overall unemployment rate rose, government data showed.

Employment fell by 24,200 jobs last month, Statistics Canada said on Friday. The Econoday consensus was for an increase of 6,000 jobs and in June, the country lost 2,200 jobs. The unemployment rate increased by 0.2 percentage points to 5.7%.

The number of jobs in the services-producing sector fell by 26,300. Construction added 25,000 jobs while employment in wholesale and retail trade declined by 21,000.

Private-sector employees fell by 69,000 last month, while public-sector jobs were little changed and the number of self-employed workers rose by 28,000.

“The July employment dip was softer than market expectations — but is still not really surprising,” said Nathan Janzen, a senior economist with RBC Economics Research. “Outsized growth in prior months has for some time looked out-of-step with other measures of economic growth like GDP.”

Average hourly wages rose to 28.99 Canadian dollars ($21.92) for permanent employees last month, compared with 27.73 Canadian dollars in the same period of 2018, Statistics Canada said. Average weekly hours for that type of worker rose to 36.7 from 36.6 a year ago.

TD Economics said the “heat” in the report was wages, with the hourly rate for permanent employees up 4.5% year-on-year in the fastest advance since early 2009, according to senior economist Brian DePratto.

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