Labour Force Survey August 2025: Labour market concerns on the rise

Well, here’s a hit we’ve all been anticipating. The impact of tariffs and economic disruption is starting to show, and the numbers are worrying. Canada’s August Labour Force release makes it clear. What’s most troubling is that the pain isn’t just in export-heavy sectors like manufacturing and trade, but also in areas like tech, professional services, and even education. Add in a weak job market for young Canadians, and the warning lights are flashing.

The August 2025 edition of the Labour Force Survey brings a set of results that deserve more attention—and more concern—than recent releases. Here’s why.

First, unlike July, where youth employment bore the biggest losses, this time the pain is centered on core-aged workers (25–54 years). Within this group, men shouldered the heavier share of the burden compared to women. Second, the downturn isn’t limited to trade-exposed sectors. In fact, industries with little to no direct exposure to trade—such as professional, scientific, and technical services, as well as education—are being hit harder. Employment in professional, scientific, and technical services alone fell by 26,000, representing a steep 1.3% decline from just a month ago. Finally, the broader picture isn’t reassuring either. The unemployment rate has reached its highest level of 2025, signaling renewed stress in the labour market.

KEY TAKEAWAYS

• Employment Levels: August recorded the sharpest decline in employment since the beginning of 2025, with a loss of 66,000 jobs. Combined with July’s decline, this has fully erased the employment gains achieved in June 2025.
• Unemployment and Participation Rates: The unemployment rate rose by 0.2 percentage points to 7.1%—the highest level since May 2016. The employment rate fell by 0.2 percentage points, down to 60.5%. Additionally, the participation rate slipped by 0.1 percentage points to 65.1%.
• Demographics and Job Types: Core-aged male workers bore the brunt of job losses (-45,000, -0.4%). Youth employment showed little to no improvement, with the unemployment rate treading at 14.5%. Majority of the employment decline in this release was driven by part-time jobs (-60,000, -1.5%), in part reflecting recent federal job cuts affecting term workers.
• Sector Breakdown: Job losses were concentrated in the services sector, which shed 67,000 jobs, while the goods sector added 2,000 jobs. Beyond tariff-exposed industries, several non-tariff sectors also recorded declines. Employment fell sharply in professional, scientific, and technical services (-26,000), transportation (-23,000), manufacturing (-19,000), and education (-8,000). Conversely, construction saw a notable gain of 17,000 jobs.
• Provincial Trends: Ontario, British Columbia, and Alberta experienced the largest employment declines (-26,000, -16,000, and -14,000, respectively). Ontario’s unemployment rate edged down by 0.2 percentage points to 7.7%, largely due to fewer people actively seeking work. In contrast, both British Columbia and Alberta faced their second consecutive monthly declines in employment, with unemployment rates climbing by 0.3 and 0.6 percentage points to 6.2% and 8.4%, respectively.

CHARTS