The previously hot labour market stalled out to end the summer with a loss of 42,000 jobs in August, Statistics Canada said Friday.

The unemployment rate held steady at 6.4 per cent last month, the agency said.

August’s losses fell short of economists’ expectations for a gain of 15,000 positions.

It puts an end to a hot streak for the labour market that saw 181,000 jobs added from April through July. The unemployment rate had dropped by half a percentage point over the previous three months.

StatCan said there was little change in the private sector and self-employment in August, but the public sector shed 20,000 positions in its third straight month of losses.

The business, building and other support services sector led declines, followed by public administration, natural resources and utilities.

The manufacturing industry has been hit hard by U.S. tariffs but the sector proved to be a surprise pocket of strength in August with a gain of 22,000 jobs.

August’s job figures only partially capture impacts from a new wave of 50 per cent tariffs on about $28 billion worth of Canadian goods applied by the United States mid-month.

StatCan said the layoff rate – the proportion of people who were unemployed as the result of a layoff between July and August – was 0.8 per cent in August. That rate stood at one per cent a year ago and averaged 0.9 per cent for the same months in the three years before the COVID-19 pandemic.

For industries reliant on export demand from the United States, StatCan said the layoff rate was marginally higher over the past 12 months when compared with other sectors.

The annual increase in average hourly wages cooled to two per cent in August, the agency said, down from 2.8 per cent in July and 3.3 per cent in June. The last time the annual wage increase was that low was November 2017.

Young workers aged 15 to 24 faced 19,000 job losses in August. Despite a tough end to the season, StatCan said this past summer jobs market was statistically better for youth than last year.

On average, the jobless rate for students returning to school in the fall stood at 15.9 per cent from May to August this year – two percentage points lower than the same period in 2025.