Canadian unemployment jumps to 7.1% as tariffs weigh on economy

"Canada had almost 1.6 million people unemployed in August as the economy lost thousands of jobs and its unemployment rate reached a nine-year peak, barring the pandemic years. On Friday, data released by Statistics Canada showed its unemployment rate rose 0.2 percentage points in August to 7.1 percent, a level last seen in May 2016 if the COVID-19 years of 2020 and 2021 were excluded."

"The economy shed 65,500 jobs in August, largely in part-time work, it said, adding that this was fuelled not only by reduced hiring but also some layoffs, with the layoff rate rising to 1 percent in August, compared with 0.9 percent observed 12 months earlier. Canada's economy has shown resilience in the last few months in the face of US tariffs on steel, aluminium and cars, but the labour data from Statistics Canada showed that the import taxes are rippling through other sectors."

Canada's labour market weakened in August as the economy lost 65,500 jobs, mainly in part-time positions, and almost 1.6 million people were unemployed. The unemployment rate rose 0.2 percentage points to 7.1 percent, a level not seen since May 2016 excluding COVID years. Layoffs rose and the layoff rate hit 1 percent, up from 0.9 percent a year earlier. Employment and participation rates fell to 60.5 percent and 65.1 percent respectively. US tariffs on steel, aluminium and cars have strained multiple sectors, and money markets priced a near 92 percent chance of a September 17 rate cut.

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