Canada lost 42,000 jobs in August, a decline that surprised economists who had predicted gains. The unemployment rate remained unchanged at 6.4%. According to Statistics Canada, 20,000 public sector workers were among those laid off, while the private sector saw little change in employment. The manufacturing industry was an exception, adding 22,000 jobs last month.
Written by the local model on 2026-09-04,
using this article's own text rather than the other coverage of the
same event (that is the story summary below).
Canada lost 42,000 jobs in August, surprising economists
Polling had expected gains.
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Polling → lose → gains
Canada's labour market stalled in August, losing 42,000 jobs, Statistics Canada said Friday.
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Canada → stall → jobs
The decline surprised some economists, who had predicted a fourth-consecutive month of gains since May.
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who → surprise → May
The unemployment rate held steady at 6.4 per cent last month, the agency said.
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agency → hold → cent
The latest Labour Force Survey shows the number of public sector workers fell by 20,000, declining for a third consecutive month.
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number → show → month
Jobs were little-changed in the private sector.
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Jobs → change → sector
The manufacturing industry was a bright spot in August, adding 22,000 jobs, while categories including public administration, natural resources and utilities all booked declines.
"Manufacturing was the only sector to record a statistically significant increase in employment during August," CIBC chief economist Andrew Grantham wrote in a research note on Friday.
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Grantham → add → Friday
"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 U.S trade.
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economy → seem → trade
By region, Quebec was hardest hit, losing 19,000 jobs.
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Quebec → hit → jobs
Ontario followed with a loss of 18,000.
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Ontario → follow → 18,000
"After a run of surprisingly hearty job results, it seemed Canada was almost due for a reality check.
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Canada → seem → check
So while this is no doubt a soft report, it's far from a shock," Bank of Montreal chief economist Douglas Porter wrote on Friday.
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Porter → write → Friday
According to Statistics Canada, average hourly wage growth in August was the slowest in nearly nine years.
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growth → accord → years
This metric slowed to two per cent on an annualized basis, from 2.8 per cent in July, and 3.3 per cent in June.
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metric → slow → June
A Reuters poll of economists had predicted employers would add 15,000 jobs in August, while the unemployment rate was expected to stay at 6.4 per cent, according to LSEG Data & Analytics.
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rate → predict → Data
Friday's data snaps a string of monthly gains.
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data → snap → gains
The Canadian economy added 75,000 jobs in July.
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economy → add → July
From April to July, those increases worked out to 181,000 jobs.
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increases → work → jobs
The latest jobs report comes as historic trade tension between Canada and the United States threatens a wide swath of industries.
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tension → come → industries
Last month, U.S. President Donald Trump imposed 50 per cent tariffs on about $28 billion worth of Canadian products.
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Trump → impose → products
Starting Tuesday, Canada will match those levies with dollar-for-dollar tariffs on $27.6 billion of comparable U.S. goods.
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Canada → start → goods
Last week, the federal government rolled out a $7.5-billion expanded economic relief program for impacted workers and businesses.
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government → roll → workers
The new supports are on top of the nearly $25 billion in tariff support it implemented over the past 18 months.
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it → implement → months
Statistics Canada said Friday that industries dependent on U.S. demand for exports continue to face "an uncertain economic context."
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industries → say → context
The agency noted the layoff rate for workers in those industries has been higher than others over the 12 months leading up to August.
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rate → note → August
"The share of Canadian exports bound for the U.S. is gradually trending lower, averaging 76 per cent in 2024, and 72 per cent in 2025, and coming in at 66 per cent in July 2026," Scotiabank economist Mitch Villeneuve wrote in a research note published on Thursday.
"
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Villeneuve → bind → Thursday
This been driven by faster growth in exports to non-U.S. markets — especially Europe."
On Wednesday, Bank of Canada Governor Tiff Macklem said that while the latest U.S. tariffs are "very steep," they apply to a "relatively narrow" selection of goods.
Job gains in U.S.
While Canada's labour market cooled in August, it was a different story south of the border.
On Friday, the U.S. Labor Department reported that American employers added 162,000 jobs last month.
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employers → drive → jobs
The agency also revised its June and July payroll figures, adding a combined 55,000 jobs.
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agency → revise → jobs
The U.S. unemployment rate held steady at 4.1 per cent in August.
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rate → hold → August
Trump took to social media on Friday to celebrate the latest numbers.
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Trump → take → numbers
"Great jobs number just announced, breaking all estimates (except mine!) by double and triple - And you haven’t seen anything yet!" he wrote in a Truth Social post.
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he → announce → post
Trump said the jobs data boosts the case for the Federal Reserve to lower its trend-setting interest rate, and threatened that without a rate drop he'd stop trading with countries that have a deficit with the U.S.
Back in Canada, many economists see this country's central bank keeping its policy rate on hold at 2.25 per cent through at least remainder of the year.
With files from The Canadian Press
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bank → say → Press
