About 16,000 jobs disappeared last month, pushing the national unemployment rate up slightly to 6.5 per cent. While the jobless rate is still trundling along near 30-year lows, August was the third month in a row of no employment gains -- the longest stretch since the end of 2001.

The broader context, however, is not nearly so dismal. The three-month stall likely marks the beginning of more moderate job creation in the months to come, rather than a sharp turn away from the booming job market of the past few years.

"It's very appealing to say we've had three months in a row, and it's the first time we've seen that since the '90s recession, and it heralds the end of the party," said David Wolf, economist for Merrill Lynch Canada Inc.

But instead, he is projecting employment gains of between 10,000 and 15,000 jobs a month this fall. That's well below the monthly average so far this year of 24,000 a month, but still points to a healthy labour market, he said.

Plus, he said, the job creation numbers have been very volatile lately -- with Statistics Canada reporting eye-popping job creation of 97,000 in May, followed by three months of virtually no growth.

"You start to smell a statistical rat," he said, saying that an average of the monthly numbers provides a clearer picture of the job market.

The three-month inaction in job creation comes after three years of near relentless employment growth that created 837,000 new jobs and pushed the unemployment rate down from 7.8 per cent. This year alone, the economy has spun out 194,000 positions to date, mostly full-time.

The manufacturing sector shed 11,300 positions last month, for a total of 87,000 fewer jobs since the beginning of the year. While troubles continue in manufacturing, what with growing global competition, the high dollar and expensive energy costs, the job losses in that sector are beginning to remind some economists of recessions past.

In past months, weakness in the manufacturing sector was more than offset by booming job creation in the services sector, but that was not the case in August. Services as a whole saw only 2,000 new jobs in August, with the finance, insurance and real estate sectors losing 10,100 jobs and public administration shedding 21,000 positions. Employment in construction was also down, losing almost 9,000 positions as the housing market in Central and Eastern Canada lost steam.

But the declines in some sectors and the softer pattern of job creation should be no surprise, given what's going on in the broader economy, economists said.

Canada's economy grew by a measly 2-per-cent annual rate in the second quarter of the year, and has shown little momentum in the third quarter. Exporters have had trouble adjusting to the high currency, and now the United States is slowing down quickly, hurting export prospects further.

Wages managed to rise sharply in August all the same. Permanent workers saw their average annual hourly wages rise by 4 per cent from August of last year, well above the inflation rate of 2.4 per cent.

But the Bank of Canada probably won't be too concerned about the inflationary impact of rising wages, economists said. Wages usually lag developments in the labour market, so rising wages now reflect strength in job creation a year ago. And there are other forces keeping inflation well in check.

If anything, the central bank will move next to cut interest rates to fuel the economy, rather than raise them to cool off inflation, CIBC World Markets believes. Chief economist Jeff Rubin projects three 0.25-percentage-point rate cuts over the next nine months.

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