Canada’s unemployment rate hits 7-year high in August

The national unemployment rate ticked higher again in August as the labour market continues to cool, prompting some economists to wonder if the Bank of Canada should be cutting interest rates faster.

Statistics Canada said Friday that the unemployment rate rose to 6.6 per cent, up from 6.4 per cent the month before, amid a gain of 22,000 net jobs. The increase reflected gains in part-time work but declines in full-time jobs.

The national unemployment rate now stands at its highest point since May 2017, according to StatCan, outside the pandemic years.

Canada’s jobless rate has continued to rise despite largely continuing to add positions as rapid population growth grows the overall labour pool.

StatCan noted that students in particular faced a difficult summer job market. The unemployment rate among students returning to school in the fall was 16.7 per cent, the highest level since 2012, excluding the pandemic.

One sector continuing to see growth in August was the health care and social assistance market. In the preceding year, this sector added 157,000 positions, which StatCan says accounts for nearly half of all job growth in the country over that period.

Educational services also added jobs in August, offset by losses in professional, scientific and technical services as well as “other services,” which StatCan says includes personal and repair work.

Average hourly wages rose 5.0 per cent in August, the agency says, down slightly from 5.2 per cent the month before.

The latest read of the Canadian labour market comes two days after the Bank of Canada delivered its third consecutive interest rate cut, lowering borrowing costs in an effort to relieve some pressure on the economy.

TD Bank economist Leslie Preston said in a note