📉 Job Losses at Pandemic-Era Levels
Canada’s job market took a hard hit in August, shedding 66,000 jobs. Statistics Canada reported that the unemployment rate rose to 7.1%, its highest level since 2016 (if we set aside the peak COVID years).
At the start of 2025, unemployment was 6.6%. Since then, it’s been climbing steadily, showing persistent weakness in the labour market.
🤔 Worse Than Economists Predicted
Economists were expecting a small gain of 10,000 jobs and only a modest rise in unemployment to 7.0%. Instead, the report came in far worse, highlighting deeper economic challenges.
👩💼 Who Was Most Affected?
- Part-time workers: Around 60,000 part-time positions disappeared, while full-time employment barely changed.
- Core working age group (25–54 years old): This demographic saw the largest job losses.
- Youth employment: Stayed mostly stable.
The participation rate (the share of people either working or actively job hunting) dropped to 65.1%, the lowest since the pandemic.
🏭 Which Sectors Lost and Gained?
Some industries faced heavy losses:
- 🔬 Scientific & technical services: down 26,000 jobs
- 🚚 Transportation & warehousing: down 23,000 jobs
- 🏭 Manufacturing: down 19,000 jobs
But there was one bright spot:
- 🏗️ Construction: added 17,000 jobs
⏪ A Weak Streak Continues
This comes on top of 41,000 jobs lost in July, marking two consecutive months of setbacks.
BMO chief economist Douglas Porter called it “arguably the weakest jobs report since the pandemic days.”
🌍 Tariffs & Trade Tensions Adding Pressure
Economists point to tariff-related industries as some of the hardest hit. The trade war has been weighing on exports and supply chains, directly impacting jobs in key sectors.
🏦 What It Means for the Bank of Canada
The weak labour report could push the Bank of Canada (BoC) toward interest rate cuts at its upcoming decision on September 17.
However, inflation is still running high, so policymakers may hesitate to move too quickly.
✅ Key Takeaway: Canada’s job market is struggling, especially in part-time and trade-sensitive sectors. Unless conditions improve, the BoC may feel pressure to step in with rate cuts.
