Canada loses 42,000 jobs in August amid US trade uncertainty

Canada lost 42,000 jobs in August, reversing a four-month trend of growth that had added 181,000 positions between April and July. Despite the loss, the national unemployment rate remained stable at 6.4%.

In Quebec, employment fell by 19,000, with the majority of losses occurring in the Montreal region. While the manufacturing sector showed unexpected resilience by adding 22,000 jobs, the public sector saw a decline of 20,000 positions, marking its third consecutive month of losses.

The employment data arrives amid heightened economic uncertainty caused by new 50% US tariffs on approximately $28 billion worth of Canadian goods. Bank of Canada Governor Tiff Macklem noted that while exports and investment had previously rebounded, trade tensions with the United States may cause companies to delay hiring and investment. Additionally, average hourly wages grew by only 2% year-over-year, the slowest pace since late 2017, excluding the pandemic-distorted year of 2021.