Canada’s economy shed 42,000 jobs in August, Statistics Canada reported Friday, and the wages of those still working grew at their slowest annual pace in nearly nine years.
Employment fell 0.2 per cent in the month and the employment rate slipped 0.1 percentage points to 60.8 per cent, the agency said in its Labour Force Survey. The unemployment rate held steady at 6.4 per cent. The result broke a four-month run of gains that had added 181,000 positions between April and July, and fell short of economists’ expectations for a modest increase, according to BNN Bloomberg.
The figure drawing less attention is on the pay side. Average hourly wages rose 2.0 per cent year over year in August, to $37.02, Statistics Canada said, down from 2.8 per cent growth in July and 3.3 per cent in June. The agency noted that outside of 2021, when pandemic distortions scrambled the series, that is the slowest wage growth recorded since November 2017.
Set against prices, that number turns negative. Canada’s consumer price index rose 3.0 per cent year over year in July, the most recent month for which inflation data is available, Statistics Canada reported Aug. 17, driven largely by a 25.7 per cent jump in gasoline prices. August inflation figures have not yet been published. But on the July comparison, wages are now growing roughly a full percentage point slower than the cost of living, meaning the average Canadian worker’s pay is losing ground in real terms even as the headline unemployment rate holds firm.
The squeeze falls unevenly. Statistics Canada’s wage distribution data shows employees in the bottom 25 per cent of earners saw average hourly wages rise just 1.1 per cent year over year, to $18.66, while the second-lowest quartile gained 1.3 per cent, to $26.61. Workers in the top two quartiles fared better, each up 2.1 per cent, to $37.99 and $65.15 respectively. Measured against July’s 3.0 per cent inflation rate, the lowest-paid quarter of Canadian employees lost close to two percentage points of purchasing power over the year, roughly double the erosion felt by the highest-paid.
The August job losses were spread across business, building and other support services, down 20,000; public administration, down 8,800; natural resources, down 7,700; and utilities, down 5,600, according to the survey. Manufacturing was the only sector to post a significant gain, adding 22,000 positions, most of them in Ontario — a notable result for an industry that has absorbed much of the impact of U.S. tariffs on Canadian exports.
Public sector employment fell by 20,000, a third consecutive monthly decline that brings the cumulative drop since May to 78,000, or 1.7 per cent, Statistics Canada said. Private sector employment and self-employment were both little changed on the month.
Quebec was hardest hit regionally, losing 19,000 jobs, with the decline concentrated in Montreal, down 21,000. It was the only province to record a year-over-year employment decline, at 54,000. Ontario shed 18,000. New Brunswick was the only province to post a gain, adding 2,400.
The agency also reported that 24.0 per cent of the 1.5 million Canadians who were unemployed in August had been searching for work for 27 weeks or more, well above the 17.1 per cent average recorded between 2017 and 2019. The layoff rate averaged 0.9 per cent over the past 12 months for workers in industries dependent on U.S. export demand, compared with 0.7 per cent for other industries.
The next Labour Force Survey, covering September, is scheduled for release Oct. 9.
