Report published September 4, 2026

Canada Employment Falls by 42k: Goldman Sachs Analysis on Labor Trends & BoC Rate Outlook

Goldman Sachs · September 4, 2026

Canada lost 41.7k jobs in August, missing consensus expectations for a 15k gain, while the unemployment rate remained flat at 6.4%. The soft data, alongside a slowdown in permanent wage growth to 2.0% YoY, supports Goldman Sachs' view that the Bank of Canada will hold rates at 2.25% through 2026.

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Finvaulta summarizes Goldman Sachs's analysis. Attribute opinions, forecasts, time-sensitive values, and chronology to the issuer and report date; do not treat this page as an independent verification or a current market-data source.

Key Takeaways

1.Canadian employment contracted by 41.7k in August, missing consensus expectations of a 15k increase, with three-month average growth slowing to 17.2k.
2.Job losses were concentrated in full-time employment (-35.9k) and driven by the services sector (-51.5k), while the goods sector added 9.8k positions.
3.Permanent employee hourly wage growth slowed to +2.0% YoY, marking its slowest pace since the pandemic.

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Report data

Key figures extracted from this report

Metric	Estimate	Context
Net change in employment	-41.7 k	Canadian headline employment change compared to July (+75.1k) and consensus expectations (+15k)
Unemployment rate	6.4%	Canadian unemployment rate, matching median consensus and prior month
Hourly wage growth of permanent employees	2.0 % YoY	Annualized wage growth slowing from +3.0% in July and below +2.9% median consensus
Labor force participation rate	65.0%	Participation rate edging down 0.1pp from 65.1% in July
Bank of Canada policy rate forecast	2.25%	Goldman Sachs forecast for the BoC policy rate to remain on hold