OTTAWA — The Canadian economy lost jobs for the second month in a row as the unemployment rate climbed to its highest level since May 2016, excluding the pandemic period.
Statistics Canada said Friday the unemployment rate ticked up to 7.1 per cent in August, its highest level since August 2021, as the economy lost 66,000 jobs for the month.
The report follows the July labour force survey that showed a loss of 41,000 jobs and an unemployment rate of 6.9 per cent.
A poll of economists heading into the release had expected August to show a gain of 10,000 jobs and the unemployment rate to rise to seven per cent for the month, according to LSEG Data & Analytics.
Leslie Preston, managing director and senior economist at TD, said the unemployment rate has now risen half a percentage point since the start of the year.
"It could be worse though, a slowdown in labour force growth is keeping the unemployment rate from rising too high, despite weak labour demand," she wrote.
Preston added markets are putting odds on an interest rate cut by the Bank of Canada later this month, but that there is still an inflation report coming before that happens.
"We have long expected two more cuts this year, with the inflation report on Sept. 16 likely to help cement the timing of the next cut," she said.
Statistics Canada said Friday there were 60,000 part-time jobs lost in August, while the economy shed 6,000 full-time jobs.
Employment fell across several industries in August.
The professional, scientific and technical services industry lost 26,000 jobs, while transportation and warehousing lost 23,000 positions and the manufacturing sector lost 19,000 jobs.
The construction industry added 17,000 jobs.
Average hourly wages rose 3.2 per cent on a year-over-year basis in August, following a year-over-year gain of 3.3 per cent in July.
The Bank of Canada's next interest rate decision set for Sept. 17.
This report by The Canadian Press was first published Sept. 5, 2025.
Craig Wong, The Canadian Press
