Canada ruled 65,500 positions in August, marking the second consecutive decline, according to a Statistics Canada workforce survey.
According to Statcan, the employment rate fell to 60.5%, while the unemployment rate rose 0.2 points to 7.1%, the highest level since May 2016, excluding 2020 and 2021.
Both employment losses and unemployment growth are higher than economists have expected.
The decline was driven primarily by part-time positions, which dropped by 60,000, while full-time jobs were barely changed.
Employment in several industries led by specialty, science and technology services (-26,100), transportation and warehousing (-22,700) and manufacturing (-19,200). Construction is a highlight, adding 17,000 jobs, or 1.1%.
Total working hours in August were basically flat (+0.1%), although up 0.9% from the same period last year. Average hourly wages rose 3.2% year-on-year to $36.31.
BMO’s Douglas Porter didn’t laugh at the word, calling the release “the weakest work report since the pop era.” Despite this, he added a small qualifier.
“The details of the release are not as terrifying as the title result, but are still mostly weak,” he added.
The American posting figures also released this morning also demonstrated softness. The non-agricultural wage rate rose by 22,000, or expected – and the two months of earnings were revised in total at 21,000.
In the next speed decision, BOC may weigh inflation more severely than weak positions
While August’s workforce was weaker than expected, economists stressed that the Canadian bank finally based its decision on inflation reports later this month.
TD’s Leslie Preston noted that the soft data is consistent with the latest description of “oversupply of labor” by BOC in its monetary policy report. She added that although this situation has not caused a cut, market expectations have begun to shift.
“Now, the market will create odds in the next cut in September,” she noted. “We have long expected two cuts this year, and the September 16 inflation report could help consolidate the timing of the next cut.”
While economists agree that today’s employment data won’t outperform the upcoming inflation report, Scotiabank’s Derek Holt noted that Canadian banks will still consider these figures.
“Is this important for BOCs? You bet.” “The meaningful decline in employment will be matched by BOCs.”
Andrew Grantham of CIBC noted that the weakened labor market is not limited to tariff-sensitive sectors, which shows that the BOC plays a role in supporting demand and recruitment. CIBC expects lowering interest rates to be part of this response.
“We continue to forecast cuts in September and further reductions in the fourth quarter, which should help the labor market stabilize at the end of the year and gradually recover in 2026, assuming there is no further huge change in U.S. trade policy,” he wrote.
After issuance, Canadian bond yields fell. The 5-year yield fell from 2.84% to 2.75%, while the 10-year yield fell from 3.31% to 3.23%.
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Last modified: September 5, 2025
