The Canadian economy lost nearly 40,000 jobs in August, pushing up the unemployment rate to
5.4% from a record low of 4.9% in July, according to Statistics Canada.
During August, a total of 39,700 jobs were lost. Economists had forecast a gain of 15,000 jobs
for the month. It was the biggest monthly increase in the unemployment rate since the last
COVID-19 restrictions were implemented across Canada this past January.
The decline in employment might signal that Canada’s labour force is slowing as the Bank of
Canada continues to raise interest rates to slow demand and dampen inflation.
Canada’s labour force participation rate rose 0.1 percentage points to 64.8%, while the number
of Canadians in the labour force rose by 66,000 in August.
Employment declines were driven by educational services and the construction sectors. The
public sector lost 27,600 positions and accounted for the bulk of August’s job losses.
Employment fell the most in British Columbia, Manitoba, and Nova Scotia, while it increased in
Quebec during August. Other provinces, including Ontario, saw little change in employment
during the month.
The Canadian dollar weakened on news of the unemployment rate rising, trading at $1.303 U.S.
Yields on Canadian 10-year bonds also declined, falling 9.6 basis points to 3.1%.
