Ottawa: Canada’s labour market suffered an unexpected setback in August, with the country losing 41,700 jobs, although the unemployment rate remained unchanged at 6.4%.
The decline came as a surprise to economists, who had expected employment to increase by around 15,000 jobs after a strong gain of 75,100 positions in July.
The latest employment figures triggered an immediate reaction in financial markets, with the Canadian dollar falling 0.51% against the US dollar to C$1.3860.
Full-time employment bears the brunt
According to data released by Statistics Canada, most of the decline came from full-time employment, which fell by 35,900 jobs. Part-time employment also declined, by around 5,800 positions.
Service-producing sectors, including healthcare, education, transportation and finance, recorded the sharpest losses, accounting for around 51,500 fewer jobs during the month.
The situation was particularly challenging for younger workers. Canada’s youth unemployment rate increased by 0.3 percentage points to 12.9%.
Meanwhile, the average hourly wage growth for permanent employees slowed to around 2%, according to the report.
Tariffs could add pressure
Canada’s labour market could face further challenges in the coming months as the impact of new US tariffs and Ottawa’s retaliatory measures feeds through to the economy.
The weaker employment figures come at a difficult time for immigrants and young jobseekers, who are already facing greater competition for employment and tighter rules around permanent residency in Canada.
