Employment declined by 66,000 (-0.3%) in August, largely the result of a decline in part-time work, and the employment rate fell 0.2 percentage points to 60.5%. The unemployment rate rose 0.2 percentage points to 7.1%, according to a report released Friday by Statistics Canada.
It was the second month in a row that employment has fallen in the country.
Employment fell for core-aged (25 to 54 years old) men (-58,000; -0.8%) and core-aged women (-35,000; -0.5%) in August. There was little change in employment for youth aged 15 to 24 and people aged 55 and older, explained the federal agency.
Employment decreased across several industries in August, led by professional, scientific and technical services (-26,000; -1.3%), transportation and warehousing (-23,000; -2.1%), and manufacturing (-19,000; -1.0%). On the other hand, there was an increase in construction employment (+17,000; +1.1%), it said.
Several provinces recorded employment declines in August; the largest were in Ontario (-26,000, -0.3%), British Columbia (-16,000; -0.5%) and Alberta (-14,000; -0.6%). Total hours worked were little changed in August (+0.1%) and were up 0.9% compared with 12 months earlier. Average hourly wages among employees increased 3.2% (+$1.12 to $36.31) on a year-over-year basis in August, following growth of 3.3% in July (not seasonally adjusted), added Statistics Canada.
Employment fell by 66,000 (-0.3%) in August, extending the decline recorded in July (-41,000; -0.2%). The employment decrease in August was mostly in part-time work (-60,000; -1.5%). Full-time employment was little changed in August, following a decline in July (-51,000; -0.3%), noted Statistics Canada.
“The employment rate—the proportion of the working-age population who are employed—fell 0.2 percentage points to 60.5% in August, the second consecutive monthly decline. The employment rate has been on a downward trend since the beginning of the year, falling 0.6 percentage points from January to August,” it said.
“The number of self-employed workers fell by 43,000 (-1.6%) in August. Self-employment has trended down in recent months, offsetting gains recorded in the second half of 2024 and in early 2025. In August, there was little change in the number of private and public sector employees.”
Since January 2025, the unemployment rate has increased 0.5 percentage points. The unemployment rate in August was the highest since May 2016 (excluding 2020 and 2021). In comparison, the unemployment rate averaged 6.0% from 2017 to 2019, just prior to the COVID-19 pandemic, said the federal agency.
“There were 1.6 million unemployed people in August, an increase of 34,000 (+2.2%) from July. The layoff rate was 1.0% in August, which had edged up compared with the rate observed 12 months earlier (0.9%) (not seasonally adjusted). This represents the proportion of people who were employed in July but had become unemployed in August as a result of a layoff,” it said.
“Those who were unemployed in July continued to face difficulties finding work in August. Just 15.2% of those who were unemployed in July had found work in August, lower than the corresponding proportion for the same months from 2017 to 2019 (23.3%) (not seasonally adjusted).
“The participation rate—the proportion of the population aged 15 and older who were employed or looking for work—fell by 0.1 percentage points to 65.1% in August.”
Andrew Grantham, Senior Economist, CIBC Capital Markets, said: “A further slump in employment, resulting in a larger-than-expected increase in the unemployment rate, adds to evidence that the Bank of Canada needs to restart interest rate cuts later this month. The 66K decline in jobs was even worse than the 41K reduction seen in the prior month and contrasted to consensus expectations for a slight increase. While the majority of the reduction came in part-time work (-60K) there was also a modest decline in full-time positions.
“By sector, trade exposed areas such as transportation & warehousing and manufacturing saw big drops, but they weren’t solely responsible for the overall reduction with business & technical services also seeing a marked reduction in positions . . . Overall, today’s data demonstrates the need for further interest rate cuts, and we continue to forecast a 25bp move in September with another to follow in Q4.”
Leslie Preston, Senior Economist, TD Economics, said: “July and August’s job losses have now more than reversed June’s outsized gain, and the Canadian economy has lost 39k jobs since January. The unemployment rate has risen half a percentage point over the same time period. It could be worse though, a slowdown in labour force growth is keeping the unemployment rate from rising too high, despite weak labour demand.
“August’s report is consistent with the Bank of Canada’s characterization of “an excess supply of labour” in July’s Monetary Policy Report. However, it hasn’t yet prompted them to lower rates beyond the pre-emptive cuts made early in the year. Markets are now putting odds on the next cut coming in September. We have long expected two more cuts this year, with the inflation report on September 16th likely to help cement the timing of the next cut.”
Douglas Porter, Chief Economist, BMO Capital Markets, said: “The start of the trade war can be traced back to late January, and the economy has now lost a cumulative 38,500 jobs on net in those seven months, with manufacturing losing 58,100 (or 3%). Meantime, the jobless rate has risen by half a point. All told, this weak report fully reinforces any bias for the BoC to ease somewhat further here, but inflation hasn’t quite given them the all-clear. The upcoming CPI report (on Sep. 16) lands a day ahead of the next BoC meeting, and it looms large. This report though lands fully on the dovish side of the ledger.”
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