Monday, September 15, 2025

Canada’s Labour Market Gains Slowing Down as Unemployment Rate Declines by 0.7% in August

It appears that Canada’s labour market continues to rebound from its coronavirus-induced historic slump of March and April, as the unemployment rate falls to 10.2%. However, further gains going forward are going to be minimal, given that the country’s economy is already opened as much as it can be.

According to the latest Labour Force Survey released by Statistics Canada, the month of August saw employment improve by 1.4%, as approximately 246,000 more jobs were added. This lowers the unemployment rate from 10.9% to 10.2%, and brings employment 5.7% below its pre-pandemic levels. However, compared to July’s job gains of 419,000 or 2.4%, it appears that the labour market is increasing, but at a decreasing rate, suggesting that further employment gains are going to continue to be subdued.

Although employment gains were relatively minimal compared to May and June levels of over 1.2 million jobs, the majority of August’s gains were concentrated on full-time work. StatsCan reported that more than 206,000 full-time positions were added, bringing full-time employment to 96.1% of pre-pandemic levels. Compared to the same time only a year prior, full-time employment was 5.4% lower in August.

With respect to accommodation and food services and retail trade, some of the hardest-hits sectors from the pandemic, the path to recovery appears to be narrowing. In April, employment in accommodation and food services suddenly declined by more than half of its pre-pandemic levels, while retail trade fell by a staggering 77.1%. Although somewhat significant gains were made between May and July, the momentum appears to have tapered off, as accommodation and food services and retail trade still remain 78.9% and 93.4% below their pre-pandemic levels, respectively.

In the meantime, as many students across Canada are preparing to return to school in September, employment in the eduction services sector appears to be rebounding sharply. The month of August saw employment levels increase by 3.9%, as 51,000 positions were added. These gains suggest that the sector is almost nearing its pre-pandemic levels, reaching 97.6% from a low of 88.5%.

Information for this briefing was found via Statistics Canada. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.

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