Canada Loses 42,000 Jobs in August as Unemployment Is Unchanged at 6.4%

Key Facts

Canadian employment fell by 42,000, or 0.2%, in August, while the unemployment rate was unchanged at 6.4%, Statistics Canada reported. The report was released on September 4, 2026, two days after the Bank of Canada left its overnight rate unchanged at 2.25% on September 2.

The labour force contracted by 36,800, and the participation rate fell 0.1 percentage points to 65.0%. The employment rate also fell 0.1 points to 60.8%. The simultaneous declines in employment and the labour force help explain why the unemployment rate was unchanged at 6.4%.

Most of the decline was concentrated in full-time work, which fell by 35,900. Average hourly wage growth fell to 2.0% year over year from 2.8% in July, with the average wage at 37.02 Canadian dollars in August.

Before the jobs report, the Bank of Canada left the overnight-rate target unchanged at 2.25%, the Bank Rate unchanged at 2.5% and the deposit rate unchanged at 2.20%. It said the economy and inflation were evolving broadly as forecast, but assessed that upside inflation risks had increased and new tariffs had increased uncertainty around the growth outlook.

Headline inflation hovered around 3% in recent months, inflation excluding gasoline was 2.2%, and core inflation measures remained close to 2% in July. The Bank said persistently high oil prices and refinery margins increase the risk of spillovers to other goods and services, while tariffs could raise costs for some businesses and feed into consumer prices over time.

The August employment data, released on September 4, were unavailable when the September 2 decision was made and therefore cannot be regarded as a reason for the decision. They subsequently add evidence of downside demand risk alongside inflation constraints on policy. September employment data are due on October 9, 2026, covering the September 13–19 survey week, followed by the next rate decision and Monetary Policy Report on October 28, 2026.