Canada's Unemployment Rate Reaches Highest Level Since 2016

**Canada's Unemployment Rate Reaches Highest Level Since 2016** Canada's unemployment rate climbed to 7.1% in August, marking the highest level since 2016, excluding the pandemic years. This increase is attributed to the loss of 66,000 jobs, primarily in part-time positions, as reported by Statistics Canada. The unemployment rate rose by 0.2 percentage points from July, continuing a trend that began earlier this year when the rate was 6.6%. The job losses in August follow a decline of 41,000 jobs in July. The layoff rate also increased to 1% in August, up from 0.9% a year earlier. Pedro Antunes, Chief Economist at The Conference Board of Canada, described the report as troubling. He noted that while youth unemployment remained high, the recent job losses predominantly affected workers aged 25 to 54. "There's an awful lot of people here who have essentially lost their employment. It does generate uncertainty and a lot of angst in the labour market when these [kinds of] numbers come out," Antunes said. The participation rate, which indicates the percentage of the population that is either employed or actively seeking work, fell to 65.1%, the lowest since the pandemic began. Job losses were widespread across various sectors, particularly those vulnerable to tariffs. The transportation and warehousing sector lost 23,000 jobs, while manufacturing saw a decline of 19,000 jobs. The scientific and technical services sector also experienced a drop of 26,000 jobs. Geographically, manufacturing hubs faced significant challenges. Windsor, Ontario, reported an unemployment rate of 11.1%, while Oshawa, Ontario, had a rate of 9%. Douglas Porter, Chief Economist at BMO Capital Markets, characterized the report as one of the weakest since the pandemic. He noted that the sectors most affected by the trade war were also the ones experiencing the largest job losses. "In some ways it's almost textbook — exactly the sectors you would expect to be affected by the trade war were some of the weakest," Porter said. The weak job report may influence the Bank of Canada’s upcoming interest rate decision, with expectations of a potential rate cut on September 17. Money markets indicated a nearly 92% chance of a rate cut following the job data release. In the United States, the labor market also showed signs of weakness, with unemployment rising to 4.3%, the highest in four years. The U.S. economy added only 22,000 jobs, falling short of the 75,000 jobs that economists had anticipated. Youth unemployment in Canada remained steady at 14.5%, a slight decrease from the previous month. This age group has faced significant challenges in the job market, with a reported unemployment rate of 17.9% for students returning to school, the highest since 2009. Experts attribute the difficulties faced by younger workers to several factors, including the rise of gig work and the impact of artificial intelligence on job availability. LJ Valencia, an author of a recent report, stated that the influx of foreign workers and relaxed restrictions on international students have contributed to a decline in job opportunities. As the Canadian economy grapples with these challenges, the outlook for job seekers, particularly among younger demographics, remains uncertain.