Canada’s labour market weakened in August as the economy lost 42,000 jobs, while the national unemployment rate remained unchanged at 6.4 per cent, according to the latest Labour Force Survey released by Statistics Canada. The decline came after four consecutive months of strong employment growth, surprising economists who had expected a modest increase in jobs.
Most of the job losses were in full-time employment, which fell by nearly 36,000 positions, while part-time employment also declined. The public sector shed about 20,000 jobs, marking its third straight month of losses, whereas employment in the private sector and self-employment remained largely unchanged. Manufacturing was the only major industry to post significant job gains during the month.
Statistics Canada reported that employment fell across several sectors, including business, building and support services, public administration, natural resources, and utilities. Regionally, Quebec and Ontario recorded the largest employment declines, while New Brunswick saw a modest increase. Youth employment also dropped, with the unemployment rate for workers aged 15 to 24 remaining significantly higher than the national average.
Despite the employment decline, the unemployment rate held steady because the labour force also contracted slightly. Average hourly wages for employees increased 2.0 per cent compared with a year earlier, a slower pace than in previous months, suggesting easing wage pressures in the labour market.
Economists say the August figures may indicate that Canada’s labour market is beginning to cool after a strong summer. Ongoing trade uncertainty, including new U.S. tariffs on some Canadian exports, could weigh further on employment in export-dependent industries in the coming months. However, analysts note that one month of weaker data is not enough to signal a broader downturn, and future employment reports will provide a clearer picture of the economy’s direction.