The Canadian economy shed 42,000 jobs, but the unemployment rate remained unchanged at 6.4 per cent in August after it declined by a total of 0.5 percentage points in May, June and July.
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Employment declines were spread across several industries, including the public sector, natural resources, utilities and business, building and other support services.
Manufacturing was the only sector to record significant employment gains in August, adding around 22,000 jobs, or a 1.2 per cent increase month to month. However, employment in this sector didn’t change much year over year, as August’s increase offset decreases seen earlier in 2026.
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On a year-over-year basis, the economy gained around 217,000 jobs in August, or a one per cent increase. The majority of that growth was concentrated in health care and social assistance, information, culture and recreation, and transportation and warehousing.
Economists largely expected Canada would add around 15,000 jobs in August, not lose jobs.
Rishi Sondhi, an economist at TD Economics, said the report was pretty soft, but the year-over-year growth in employment is an indicator that the labour market has been resilient despite economic uncertainty from U.S. tariffs and trade tensions.
“There was a meaningful drop in employment (in August), but when you zoom out a little bit, the trends are still favourable,” he said. “Some giveback after a string of robust gains was to be expected.”
However, he said the new U.S. tariffs could elevate uncertainty and keep weighing on hiring.
