August’s LFS marked a step backward for the labour market. Shedding jobs after three months of consecutive gains doesn’t feel good, but this reads more like a giveback than a turn. The three-month average of job gains remains positive, employment is up from last year, and young workers appear to be faring better than they did last year. Unfortunately, the path ahead is shrouded in shadow. Any potential impacts from a reignition of trade tensions with the United States would not be reflected in the August data and may not be fully understood for months.
Manufacturing stood out as one of the few bright spots in today’s report, as it was the only sector to show a significant increase in employment. But against the backdrop of an escalating trade war, it’s unclear if manufacturing will be able to keep that up. Fortunately, Indeed’s data provide some possible clues as we look ahead.
At the height of the trade war in 2025, Indeed data showed early declines in hiring activity among manufacturing jobs and in trade-exposed regions, including Saint John and Windsor. More than a year later, manufacturing and Saint John postings have bounced back, while hiring in Windsor has held up. However, overall hiring activity has begun moving sideways again after increasing in early spring, a sign that employer demand is not strengthening alongside the recent job gains.
There are some signs that the market is doing a slightly better job of absorbing workers this year. Youth unemployment was down 1.4 percentage points year-over-year in August. Still, even as the labour market is getting better at holding on to workers, hiring new ones remains few and far between. For Canadians who have found themselves unemployed, it is still tough to break back into the labour market, and the percentage of long-term unemployed rose to 24% in August. Amid a resurgence of trade policy uncertainty, it is hard to imagine employers are ready to increase headcount in the near future, leaving many of these unemployed workers on the sidelines into the fall.