Canada's unemployment rate climbed to 7.1% in August, while Quebec experienced a 6% unemployment rate during the same period.
Canada Faces Job Losses and Increased Unemployment
Canada is experiencing a surge in job losses and rising unemployment rates, according to recent data. The sectors most affected include manufacturing, transportation and warehousing, professional, scientific, and technical services, and education.
The unemployment rate in Canada increased from 6.9% to 7.1% in August, a figure not seen since May 2016, excluding pandemic months. Eight of the ten Canadian provinces experienced job losses, with Quebec being one of the exceptions, but the increase in job seekers in the province offset the net gain of 7,500 jobs. Unemployment in Quebec jumped from 5.5% to 6% in August.
The unemployment rate for workers aged 15 to 24 remained virtually unchanged at 14.5%. Interestingly, more than half of those who wanted to work more hours cited covering current expenses as their main reason.
The rise of on-demand jobs may have facilitated the trend of Canadians holding multiple jobs. Approximately 8.8% of Canadian workers and 7.4% of Quebec workers would have preferred to work more hours last month. More than 5.5% of Canadian workers held down more than one job last month, with the proportion of these workers who already had a full-time job increasing from 59% in 2007 to 67% in 2025.
The sectors where multiple jobs are most common are information, culture, and leisure services, education, and accommodation and food services. More than a third of Canadians holding multiple jobs cited paying for basic needs as the main reason.
The average hourly wage increase over 12 months was 3.2% in August, but inflation was only 1.7% in July. This discrepancy could potentially lead the Bank of Canada to proceed with further interest rate cuts. According to a Reuters survey, more than 80% of economists expect the Bank of Canada to cut its key interest rate by 25 basis points to 2.50% at the September 17 meeting.
However, not all experts agree on this course of action. Among Canada's big banks, only RBC expects the rate to remain unchanged, depending on inflation data released just before the meeting. Robert Both, macro strategist at TD Securities, supports a further 25 basis points cut in September and October due to deteriorating labor market conditions.
In conclusion, Canada is facing a challenging employment landscape, with job losses and rising unemployment rates across various sectors. The trend of Canadians holding multiple jobs could be a response to the need for additional income to cover current expenses, particularly in the face of stagnant wage growth and rising costs. The Bank of Canada's decision on interest rates could provide some relief for the struggling economy.
