Canada's Labor Market Loses Steam in August with 41,700 Job Losses
Canada's labor market lost steam in August as it shed 41,700 jobs, according to data released on Friday. This significant decline is a sharp contrast to the unusually strong summer hiring seen earlier. The job losses were widespread, with full-time employment declining by 35,900 positions and part-time employment dropping by 5,800.
The unemployment rate remained steady at 6.4%, but this figure may not accurately reflect the current state of the labor market. The recent gains in hiring have been influenced by temporary factors such as census-related employment and jobs associated with the soccer World Cup, which added 181,000 positions between April and July.
The Canadian economy has proven more resilient than expected through over 18 months of U.S. trade restrictions, but the new set of tariffs and Canada's retaliation coming into effect from early next week are expected to deflate some momentum in the labor market. The service-producing industries, which employ four out of every five people in the labor force, bore the brunt of the employment decline in August.
Analysts polled by Reuters had forecast job gains of around 15,000, but the actual figure fell short of expectations. The growth rate of permanent employees' average hourly wages dropped to 2% in August from 3% last month, its lowest level in more than seven years outside of the pandemic.