The unemployment rate rose to 7.1 per cent in August — nearly the highest rate since 2016 — while the Canadian economy lost 66,000 jobs, according to new data from Statistics Canada.
After the unemployment rate held steady in July at 6.9 per cent, it increased again last month, making it the highest the unemployment rate has been (excluding pandemic highs) since May 2016.
The unemployment rate has been rising consistently this year, down from a 6.6 per cent rate in January.
The figures are more dire than some economists had predicted — a Reuters poll ahead of the release predicted a gain of 10,000 jobs and the unemployment rate to rise to 7 per cent.
Of the jobs lost, Statistics Canada says most — some 60,000 — were part-time ones, while there was little change in the number of full-time jobs.
Most of the jobs lost were also among workers between 25 to 54 years old, with little change in youth employment, according to StatsCan.
Employment also fell across a number of industries, including some hit by tariffs. In particular, the scientific and technical services sector lost 26,000 jobs, while transportation and warehousing dropped 23,000 and manufacturing bled 19,000.
Construction, on the other hand, made gains, adding 17,000 new roles.
This comes after the economy lost a total of 41,000 jobs last month.
BMO chief economist Douglas Porter says that, plainly, today’s news is not good.
“Suffice it to say that this was worse than expected, and arguably the weakest jobs report since the pandemic days,” Porter said in a note.
He says the losses in tariff-exposed sectors show the impact of the trade war. He says the weak report could open the door to rate cuts by the Bank of Canada later this month, though with inflation remaining high, that factor hasn’t given them the “all clear.”
The central bank will announce its next interest rate decision on Sept. 17.
