Canada loses 42,000 jobs in August as wage growth slows to 2%

Canadian employment fell by 42,000, or 0.2%, in August 2026, Statistics Canada reported on 4 September. The unemployment rate was unchanged at 6.4%, and the employment rate edged down 0.1 percentage points to 60.8%.

The drop followed a strong run. According to The Canadian Press's report on the release, employment had risen by 181,000 from April to July, including 75,000 in July alone.

Where jobs were lost and gained

• Business, building and other support services: down 20,000 (−2.8%)
• Public administration: down 8,800 (−0.7%)
• Natural resources: down 7,700 (−2.3%)
• Utilities: down 5,600 (−3.5%)
• Manufacturing: up 22,000 (+1.2%)

Unemployment rose among men aged 25 to 54, by 0.2 points to 6.0%, and fell among women in the same age group, by 0.2 points to 5.0%. The youth unemployment rate was little changed at 12.9%.

Wages slow sharply

Average hourly wages were 2.0% higher than a year earlier, down from 2.8% in July and 3.3% in June: the slowest annual increase since November 2017.

What it means for the loonie

The Bank of Canada kept its policy rate at 2.25% in September, its seventh straight hold (report). Falling employment and slower wage growth ease any pressure on the Bank to raise rates, even with energy prices high. For USD/CAD, that has to be weighed against oil, which usually supports the Canadian dollar (oil and the Canadian dollar), and against the Federal Reserve's decision on 16 September.

Second-quarter GDP, published a week earlier, told a stronger story: see Canada's economy grows at a 3.3% annualized pace.