Canada Unemployment Hits 7.1%, 66k Jobs Lost in August

Canada unemployment rose to a nine-year high of 7.1% in August as the economy lost 66,000 jobs, mostly in part-time roles. Trade-sensitive sectors—including transportation, warehousing and manufacturing—posted steep declines. This follows a 41,000-job drop in July and a 1.6% annual GDP contraction in Q2. Weak Canada unemployment data has led markets to price in a potential Bank of Canada interest rate cut on Sept. 17. Economists note that job cuts now extend beyond industries hit by U.S. tariffs, while core inflation measures remain elevated at a 2.4% three-month average. Regionally, Alberta’s jobless rate climbed to 8.4%, and youth unemployment reached 14.5%. Meanwhile, the U.S. plans to reopen USMCA talks, adding another layer of trade uncertainty to Canada’s fiscal outlook.