Canada shed 65,500 positions in August, marking a second straight month-to-month decline, in line with Statistics Canada’s labour power survey launched this morning.
The employment fee fell to 60.5%, whereas the unemployment fee rose 0.2 factors to 7.1%—its highest stage since Might 2016, excluding 2020 and 2021, StatCan reported.
Each the job losses and the rise in unemployment got here in increased than economists had anticipated.
The decline was pushed largely by part-time positions, which fell by 60,000, whereas full-time employment was little modified.
Employment fell throughout a number of industries, led by skilled, scientific and technical providers (-26,100), transportation and warehousing (-22,700) and manufacturing (-19,200). Building was a brilliant spot, including 17,000 jobs, or 1.1%.
Whole hours labored had been primarily flat in August (+0.1%), although up 0.9% from a yr earlier. Common hourly wages rose 3.2% year-over-year to $36.31.
BMO’s Douglas Porter didn’t mince phrases, calling the discharge “arguably the weakest jobs report because the pandemic days.” Nonetheless, he added a small qualifier.
“The main points of the discharge weren’t fairly as dire because the headline outcomes, however nonetheless largely weak,” he added.
U.S. job figures, additionally launched this morning, pointed to softness as effectively. Non-farm payrolls rose by 22,000—under expectations—whereas beneficial properties from the prior two months had been revised down by a mixed 21,000.
BoC more likely to weigh inflation extra closely than weak jobs in subsequent fee determination
Although August’s job numbers got here in weaker than anticipated, economists stress the Financial institution of Canada will finally base its determination on the inflation report due later this month.
TD’s Leslie Preston famous the mushy knowledge aligns with the BoC’s current description of an “extra provide of labour” in its Financial Coverage Report. She added that whereas such situations haven’t but prompted cuts, market expectations are starting to shift.
“Markets at the moment are placing odds on the subsequent minimize coming in September,” she famous. “Now we have lengthy anticipated two extra cuts this yr, with the inflation report on September 16 seemingly to assist cement the timing of the subsequent minimize.”
Whereas economists agree right this moment’s jobs knowledge gained’t outweigh the upcoming inflation report, Scotiabank’s Derek Holt famous the Financial institution of Canada will nonetheless take these numbers under consideration.
“Does it matter to the BoC? You guess it does,” he wrote. “A significant decline in employment could be taken dovishly by the BoC.”
CIBC’s Andrew Grantham famous the weakening labour market isn’t restricted to tariff-sensitive sectors, suggesting the BoC has a job in supporting demand and hiring. CIBC expects fee cuts to be a part of that response.
“We proceed to forecast a September minimize and an extra discount in This fall, which ought to assist the labour market stabilise in direction of year-end and convey a gradual restoration in 2026, assuming no additional dramatic adjustments in U.S. commerce coverage,” he wrote.
Canadian bond yields fell following the discharge. The 5-year yield dropped to 2.75% from 2.84%, whereas the 10-year slipped to three.23% from 3.31%.
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Final modified: September 5, 2025
