Canada lost 42,000 jobs in August. Economists had been looking for a gain of 15,000. Statistics Canada released the figure on Friday, Sept. 4, 2026, and the unemployment rate held at 6.4 per cent.
The bottom line: one weak month followed a strong run. The economy had added 181,000 positions from April through July, including 75,000 in July alone. Economists quoted by The Canadian Press were not alarmed. Andrew Hencic, a senior economist at TD Bank, said that “given the noisy nature of the data a step backwards is not a major surprise after a string of hot reports.” He added that the steady jobless rate matters more than the headline loss.
Where the losses fell
The public sector shed 20,000 jobs, its third straight monthly decline. Business, building and other support services led the drop, followed by public administration, natural resources and utilities. Workers aged 15 to 24 lost 19,000 jobs. Manufacturing went the other way and gained 22,000, a pocket of strength even though U.S. tariffs have hit the sector hard. The United States imposed a new round of 50 per cent tariffs on about $28 billion worth of Canadian goods on Aug. 22, and Canada plans its own retaliatory duties from Sept. 8.
Wage growth cooled to two per cent a year, from 2.8 per cent in July and 3.3 per cent in June. That is the slowest pace since November 2017. RBC senior economist Claire Fan blamed an aging population and slower immigration for what she called “dismal job growth.” The Bank of Canada had held its benchmark rate at 2.25 per cent earlier in the week.
The U.S. side of the ledger
South of the border the same morning brought the opposite surprise. The Bureau of Labor Statistics reported that the U.S. economy added 162,000 jobs in August, the strongest monthly gain since March. Economists had forecast 53,000, according to Quartz. Unemployment stayed at 4.1 percent. Average hourly earnings rose 10 cents, or 0.3 percent, to $37.75.
Investors will note what a hot report does to rate bets. Reuters, as relayed by Sunday Guardian Live, said futures pointed to roughly a 65% chance of a Federal Reserve rate hike at the September 15-16 meeting, up from about 55% before the data. At 9:44 a.m. ET the Dow Jones Industrial Average was down 0.33% at 53,509.63, the S&P 500 had fallen 0.16% and the Nasdaq Composite had slipped 0.04%. The two-year Treasury yield touched its highest level since January 2025.
Lululemon shares came under pressure after the retailer cut its full-year forecasts, and Adobe fell after its CEO, Shantanu Narayen, announced a leadership transition. U.S. crude traded down 1.6% at $89.87 a barrel.
Sources
- Labour force Canada: Economy sheds 42,000 jobs | BNN Bloomberg (The Canadian Press)
- August 2026 jobs report: U.S. adds 162,000 jobs, unemployment 4.1% | Yahoo Finance (Quartz)
- Dow Jones Today LIVE: Index Falls 0.33% as Strong US Jobs Report Boosts Fed Rate-Hike Bets | Sunday Guardian Live (citing Reuters)
