Canada’s unemployment rate increased to 6.6% in August, marking a 0.2 percentage point rise from July, according to the latest Labour Force Survey (LFS) data from Statistics Canada.
The August rate is the highest since May 2017, outside the pandemic years of 2020 and 2021. Employment saw a modest increase of 22,000 jobs (+0.1%), but this was not enough to offset the growing number of job seekers.
Gains in part-time work (+66,000) were largely offset by a decline in full-time employment (-44,000), resulting in little overall change in the labour market. August represents the fourth consecutive month of minimal employment shifts.
The rise in unemployment comes amid a long-term downward trend in the employment rate, which fell by 0.1 percentage points to 60.8% in August. Over the past 11 months, the employment rate has dropped 10 times, underscoring challenges in keeping pace with population growth.
Sector breakdown: Health care and education see gains, technical services decline
Several industries experienced notable shifts in employment. The educational services sector added 27,000 jobs (+1.7%), while health care and social assistance saw an increase of 25,000 jobs (+0.9%). Employment in health care has grown by 157,000 (+5.8%) over the past year, accounting for nearly half of total net employment growth in Canada.
Other sectors were not as fortunate. Employment in “other services,” which includes personal and repair services, declined by 19,000 (-2.3%), and professional, scientific, and technical services saw a reduction of 16,000 jobs (-0.8%). Utilities and natural resources also posted declines.
Regional differences: Alberta leads gains, Newfoundland and Labrador lags
Employment increased in Alberta (+13,000), Nova Scotia (+5,000), Manitoba (+4,400), and Prince Edward Island (+900) in August, while Newfoundland and Labrador experienced a drop of 2,400 jobs (-1.0%).
Despite the employment growth in Alberta, the province’s unemployment rate rose to 7.7%, up 0.6 percentage points, as more people searched for work. In Newfoundland and Labrador, the unemployment rate climbed 0.8 percentage points to 10.4%, reflecting the continued economic struggles in the region.
Wage growth continues, but challenges remain for some groups
Wage growth remained strong in August, with average hourly earnings increasing by 5.0% year-over-year, bringing the average wage to $35.16. However, not all workers benefited equally. Recent immigrants (those who arrived within the past five years) saw little change in their wages, which averaged $30.59. This group also reported lower levels of satisfaction with their pay compared to Canadian-born workers.
While more than 60% of established immigrants and Canadian-born workers felt they were paid appropriately, only 57.3% of recent immigrants expressed the same sentiment.
Outlook: Continued challenges for youth and students
Young people continue to face higher unemployment rates, particularly students returning to school. Over the summer, the unemployment rate for returning students aged 15 to 24 averaged 16.7%, up from 12.9% the previous year. For younger students aged 15 and 16, the rate exceeded 27%.
The job market for students was especially difficult for racialized groups, with Black students facing an unemployment rate of 29.5%, a 10.1 percentage point increase from the summer of 2023.
As the labour market continues to face headwinds, the data suggest that Canada’s employment outlook remains uncertain, with rising unemployment and challenges for vulnerable groups expected to persist into the fall.