Canada loses 42,000 jobs as summer hiring surge fades

Canada’s economy lost approximately 42,000 jobs in August, reversing part of the strong employment growth recorded earlier in the summer. Statistics Canada reported that full-time employment fell by nearly 36,000 positions, while part-time work declined by about 6,000. The result was considerably weaker than economists’ expectations for a gain of roughly 15,000 jobs, although the national unemployment rate remained unchanged at 6.4 per cent as fewer people participated in the labour force.

The slowdown was concentrated in service-producing industries, including health care, education, transportation and retail, while youth employment fell by 19,000 positions and the youth unemployment rate rose to 12.9 per cent. Alberta’s unemployment rate remained above the national average at 7.0 per cent, compared with 6.2 per cent in British Columbia. The August decline followed several months of unusually strong hiring that had been partly supported by temporary census and FIFA World Cup-related employment.

Annual wage growth among permanent employees slowed to 2.0 per cent, its weakest pace in more than seven years outside the pandemic period and below the current rate of consumer inflation. The figures suggest Canada’s labour market entered the third quarter with less momentum as businesses contend with renewed trade tensions and incoming U.S. tariffs. The weak report may discourage the Bank of Canada from raising interest rates despite its concerns about energy-driven inflation, with the central bank’s next rate decision scheduled for October 28.