OTTAWA — Statistics Canada says the economy lost 42,000 jobs in August, falling short of economists’ expectations for a modest gain and leaving the unemployment rate unchanged at 6.4 per cent. The drop in employment stops short a strong run for the labour market, which added 181,000 jobs from April through July. There were 20,000 fewer people working in the public sector last month, marking the third straight month of declines. The manufacturing industry has been hit hard by U.S. tariffs but the sector proved to be a surprise pocket of strength in August with a gain of 22,000 jobs. StatCan says the share of people who were unemployed as the result of a layoff is down from a year ago but that rate is higher in industries reliant on U.S. demand for exports. The annual increase in average hourly wages, meanwhile, cooled to two per cent in August, down from 2.8 per cent in July. This report by The Canadian Press was first published Sept. 4, 2026.
