Employment declined by 42,000 (-0.2%) in August and the employment rate fell 0.1 percentage points to 60.8%. The unemployment rate was unchanged at 6.4%, according to a report released Friday by Statistics Canada.
Employment fell among youth aged 15 to 24 (-19,000; -0.7%) and edged down (-16,000; -0.1%) among people in the core-age (25 to 54 years old), said the federal agency.
While the overall unemployment rate was unchanged in August, it increased among core-aged men (+0.2 percentage points to 6.0%) and fell for core-aged women (-0.2 percentage points to 5.0%). The unemployment rate was little changed for youth (12.9%) and people aged 55 and older (5.1%), it added.
“Employment declined in business, building and other support services (-20,000; -2.8%), public administration (-8,800; -0.7%), natural resources (-7,700; -2.3%) and utilities (-5,600; -3.5%), while it increased in manufacturing (+22,000; +1.2%),” explained Statistics Canada.
The August decrease follows a cumulative increase of 181,000 (+0.9%) from April to July. On a year-over-year basis, employment was up by 217,000 (+1.0%) in August, it said.
The employment rate—the proportion of the population aged 15 and older who are employed—decreased by 0.1 percentage points to 60.8% in August. The employment rate in August was on par with the rate recorded at the start of the year, and up 0.3 percentage points compared with August 2025.
Manufacturing (+22,000; +1.2%) was the only sector to record a significant increase in employment in August, with most of that increase (+14,000; +1.7%) in Ontario. On a year-over-year basis, employment in this sector was little changed, as the increase in August offset decreases earlier in the year.
Over the 12 months to August, employment growth was concentrated in health care and social assistance (+129,000; +4.5%), information, culture and recreation (+49,000; +5.9%) and transportation and warehousing (+47,000; +4.4%). On the other hand, wholesale and retail trade (-55,000; -1.8%) recorded the largest decline across industries over the same period.
The number of public sector employees fell in August (-20,000; -0.4%), down for the third consecutive month. Since May, the number of public sector employees has declined by 78,000 (-1.7%) and was little changed in August compared with a year earlier.
Employment was little changed among private sector employees in August but was up by 156,000 (+1.1%) year over year. Similarly, self-employment was little changed in August compared with the previous month but increased by 80,000 (+3.0%) compared with 12 months earlier, noted Statistics Canada.
It said the unchanged unemployment rate follows three consecutive monthly declines in May, June and July totalling 0.5 percentage points.
“Among the 1.5 million people who were unemployed in August, 24.0% were in long-term unemployment, meaning they had been continuously searching for work for 27 weeks or more. This proportion was similar to that of August 2025 (23.0%) and remained above the pre-COVID-19 pandemic average of 17.1% recorded from 2017 to 2019,” it explained.
“The layoff rate was 0.8% in August, slightly below the rate of 1.0% observed 12 months earlier and similar to the average layoff rate (0.9%) observed for the corresponding months from 2017 to 2019 (not seasonally adjusted). The layoff rate refers to the proportion of people who became unemployed due to a layoff between July and August.”
Unemployment rate by province and territory, August 2026
Andrew Grantham, Senior Economist, CIBC Capital Markets, said the Canadian labour market cooled down in August, giving back more than half of the jobs gained during the extremely hot July.
“Looking through the monthly volatility, the 3, 6 and 12 month averages for employment growth were all hovering around 20K in August, which is slightly above the pace of population growth and consistent with the gradual improvement in the unemployment rate that we have seen. However, today’s print seems to tally with other evidence (exports, monthly GDP) that the economy is slowing again in Q3 following a strong second quarter and, with heightened uncertainty regarding US trade, we continue to think that the Bank of Canada will remain on hold even after policymakers expressed greater concern over the inflation outlook earlier this week.”
Doug Porter, Chief Economist, BMO Capital Markets, said: “After a run of surprisingly hearty job results, it seemed Canada was almost due for a reality check. So while this is no doubt a soft report, it’s far from a shock, and in part reflects the ongoing sag in the labour force population. Meantime, sturdy hours worked are a silver lining, and overall employment is still up 1.0% y/y. Still, the August cooldown in employment and average wages will reinforce the Bank of Canada’s holding pattern, and should calm some of the extreme rate-hike pricing in the market (though the big US payrolls number is acting as a heavy offset on that front).”
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