The economy sheds 42,000 jobs

Sep 4, 2026Moment 3 of 7

The economy sheds 42,000 jobs

WHAT HAPPENED

Statistics Canada's Labour Force Survey showed the economy lost 42,000 jobs in August 2026. Economists had expected a gain of about 15,000. The loss ended a four-month run that had added 181,000. The unemployment rate held at 6.4 per cent. Wage growth slowed to 2.0 per cent, the weakest since 2017 leaving out the pandemic year 2021. Economists split on how to read it. TD's Andrew Hencic and RBC's Claire Fan pointed to the steady unemployment rate as the better gauge. An FXStreet analysis countered that the rate held because the labour force shrank. CIBC's economists said the report reinforced their forecast of no rate change through the end of 2026. Traders saw more risk. At noon that day financial markets put the chance of an October 28 hike at better than 25 per cent. That figure comes from financial-data firm LSEG. The Canadian Press described the odds as low, though well up on the week.

Why this matters

The jobs report was the first hard number since the hold, and it was worse than economists expected. At midday, market odds of an October hike were still higher than at the start of the week.

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Factual assertion Supported by evidence

Canada's economy lost 42,000 jobs in August 2026, Statistics Canada reported. The unemployment rate held steady at 6.4 per cent. Economists had expected a gain of about 15,000.

How can jobs vanish without the unemployment rate moving? → Factual assertion Supported by evidence

Average hourly wages grew 2.0 per cent year over year in August 2026, Statistics Canada reported. That was down from 2.8 per cent in July. It was the slowest pace since November 2017, leaving out the pandemic year 2021.

Why do rate-setters care about your raise? → Forecast Not yet confirmed

Financial markets priced the chance of a quarter-point rate hike at the Bank of Canada's October 28 meeting at more than 25 per cent. That was the reading as of midday September 4, 2026, according to LSEG data. The Canadian Press called it still low but up sharply from the start of that week.

Who 'expects' a hike when markets do? → See all 3 claims from this moment →