Canada Employment Falls 42,000 in August as Unemployment Holds at 6.4%

Canada’s labour market lost 42,000 jobs in August, with employment falling 0.2% to 21.173 million, while the unemployment rate held at 6.4%. The employment rate slipped 0.1 percentage points to 60.8%, and the participation rate also fell 0.1 points to 65.0%.

The monthly decline followed four months of gains. Employment had increased by a cumulative 181,000 from April through July, and the August level was still 217,000, or 1.0%, higher than a year earlier. The employment rate was unchanged from where it stood at the start of 2026 and remained 0.3 percentage points above its August 2025 level.

Statistics Canada’s August Labour Force Survey, released Friday, measures labour-market conditions during the August 9 to 15 reference week. The agency said the monthly estimates are seasonally adjusted unless otherwise noted and cautioned that individual monthly changes can show more sampling variability than longer-term trends.

Youth and public-sector employment led the August decline

Employment among people aged 15 to 24 fell by 19,000, or 0.7%, while employment among core-age workers aged 25 to 54 edged down by 16,000, or 0.1%. Employment for people aged 55 and older was little changed. The youth unemployment rate edged up 0.3 percentage points to 12.9%, although it remained below the 14.3% rate recorded a year earlier.

Public-sector employment fell by 20,000, or 0.4%, marking a third consecutive monthly decline. Since May, public-sector employment has decreased by 78,000, or 1.7%. Private-sector employment was little changed in August but stood 156,000, or 1.1%, above its year-earlier level. Self-employment was also little changed on the month and was up 80,000, or 3.0%, from August 2025.

The stable headline unemployment rate also masked differences within the labour force. Among core-age men, the unemployment rate rose 0.2 percentage points to 6.0% as more men entered the labour market and searched for work. For core-age women, the rate fell 0.2 points to 5.0% as the labour force declined by 31,000 and employment edged down by 17,000.

About 1.5 million people were unemployed in August. Of that group, 24.0% had been continuously searching for work for 27 weeks or more, compared with 23.0% a year earlier and a pre-pandemic average of 17.1% from 2017 through 2019. That measure points to continued difficulty for a portion of job seekers even though the overall unemployment rate did not rise during the month.

Manufacturing gains stand out as several industries weaken

Employment changes differed sharply by industry. Business, building and other support services lost 20,000 jobs, or 2.8%, while public administration fell by 8,800, natural resources by 7,700 and utilities by 5,600. Statistics Canada said employment in each of those four industries was little changed from a year earlier despite the August declines.

Manufacturing moved in the opposite direction, adding 22,000 jobs, or 1.2%, and was the only industry to post a statistically significant employment increase in August. Ontario accounted for most of that gain, with manufacturing employment in the province rising by 14,000. On a year-over-year basis, manufacturing employment was little changed because the August increase offset losses earlier in 2026.

The annual picture was stronger in several service and logistics industries. Employment in health care and social assistance was up 129,000, or 4.5%, from August 2025. Information, culture and recreation gained 49,000, while transportation and warehousing added 47,000. Wholesale and retail trade recorded the largest year-over-year decline among industries, falling by 55,000, or 1.8%.

At the provincial level, Quebec employment fell by 19,000, with the decline concentrated in Montréal, where employment decreased by 21,000. Quebec was also the only province with lower employment than a year earlier, down 54,000, or 1.2%. Ontario employment edged down by 18,000 after rising by a net 119,000 from March through July. New Brunswick added 2,400 jobs, while employment was little changed in the other provinces.

Statistics Canada also highlighted the uncertain environment facing industries that depend heavily on U.S. demand for exports. Over the 12 months to August, the layoff rate averaged 0.9% in those industries, compared with 0.7% elsewhere. The agency noted that this backdrop was compounded by recent U.S. tariffs on Canadian exports, but the August figures do not support treating tariffs as the cause of the overall monthly employment decline. Manufacturing employment, for example, rose during the month.

Wage growth cools as the next labour report approaches

Average hourly wages among employees were 2.0% higher than a year earlier in August, rising by C$0.71 to C$37.02. That was slower than the 2.8% annual increase recorded in July and 3.3% in June. Statistics Canada said the August pace was the slowest since November 2017, excluding 2021 during the COVID-19 pandemic.

Wage growth was also uneven across the distribution. Average hourly wages for employees in the bottom wage quartile rose 1.1% from a year earlier to C$18.66, while wages in the second-lowest quartile increased 1.3% to C$26.61. The third and top wage quartiles each recorded 2.1% growth, with average hourly wages reaching C$37.99 and C$65.15, respectively.

The unchanged 6.4% unemployment rate followed three consecutive monthly declines from May through July that totalled 0.5 percentage points. August therefore interrupted the recent employment-growth streak without reversing the earlier improvement in the national jobless rate. The overall layoff rate was 0.8%, slightly below the 1.0% rate recorded a year earlier and close to the 0.9% average for the same months of 2017 through 2019.

Statistics Canada is scheduled to release the September Labour Force Survey on October 9. That report will cover labour-market conditions during the September 13 to 19 reference week and will show whether August’s employment decline was followed by another loss or a return to growth.