The employment decline came as Canadian businesses face continued uncertainty from tariffs and strained trade relations with the United States, although several other sectors also recorded significant losses.

Body: Canada’s labor market contracted in August, with the country losing 41,700 jobs, according to the latest labor data Statistics Canada released Friday. The decline followed a combined gain of 181,000 jobs from April through July. It came as the Canadian economy continues to deal with uncertainty surrounding its trade relationship with the United States.

Statistics Canada reported that employment fell by approximately 42,000 positions, or 0.2%, while the unemployment rate remained unchanged at 6.4%. The employment rate declined slightly to 60.8%.

The losses were concentrated in several sectors. Business, building and other support services lost 20,000 jobs, public administration declined by 8,800, natural resources fell by 7,700, and utilities dropped by 5,600. Manufacturing, however, added 22,000 jobs during the month.

The August report comes amid continued economic pressure from the ongoing trade dispute between Washington and Ottawa. The United States has imposed tariffs on a range of Canadian goods, while Canada has responded with retaliatory measures. The uncertainty surrounding future access to the American market has created additional challenges for Canadian exporters and manufacturers.

Canada’s trade relationship with the United States remains particularly important to its economy. Recent data showed Canadian exports to the U.S. declined 6.6% in July, while the country’s overall exports fell 2.3%. Energy and metal products, which account for a significant share of Canadian exports, recorded notable declines.

The August employment decline was larger than economists had expected. Reuters reported that economists had anticipated an increase of roughly 15,000 jobs.

The latest figures also showed wage growth slowing. Average hourly wages increased 2.0% from a year earlier to $37.02, down from 2.8% annual growth in July. Youth unemployment rose to 12.9%.

Despite the monthly decline, Canadian employment remained 217,000 jobs higher than a year earlier. Still, the combination of weaker employment, slowing wage growth, and continued trade uncertainty presents challenges for Prime Minister Mark Carney’s government as it attempts to stabilize the economy and negotiate with Washington.

Canadian officials and businesses now face continued uncertainty over the future of U.S.-Canada trade, with further labor-market volatility possible if tariff pressures remain elevated.