Key facts
- Canada's economy lost 41,700 jobs in August.
- The unemployment rate held steady at 6.4%.
- Full-time employment declined by 35,900 positions.
- Service-producing industries experienced the largest job losses.
- Average hourly wages for permanent employees fell to 2%.
Canada's labor market showed signs of cooling in August, with the economy losing 41,700 jobs, a significant slowdown from the robust hiring seen in the preceding summer months. The unemployment rate remained unchanged at 6.4%. The majority of job losses occurred in full-time employment, which decreased by 35,900 positions, while part-time employment also saw a reduction of 5,800 jobs. The service-producing sector, which accounts for a large portion of the workforce, bore the brunt of the decline, losing 51,500 jobs, particularly in business, building, support services, and wholesale and retail trade.
Recent strong job gains, totaling 181,000 between April and July, were partly attributed to temporary factors like census-related employment and the soccer World Cup. Despite over 18 months of U.S. trade restrictions, widespread layoffs had not materialized until this report. However, the introduction of new U.S. tariffs and Canada's retaliatory measures, effective early the following week, are expected to temper the labor market's momentum.
The labor force itself shrank for the first time since February, a trend influenced by tighter immigration rules and an aging population. Youth unemployment saw an uptick, rising 0.3 percentage points to 12.9%, reversing a downward trend. Furthermore, the average hourly wage for permanent employees, a key inflation indicator, slowed to 2% from 3% the previous month, marking its lowest level in over seven years outside of the pandemic period.