Loonie takes a dive as Canada loses almost 42,000 jobs while U.S. adds 162,000

For Canadians, the timing matters. This is happening while the Bank of Canada holds its policy rate at 2.25% while warning that new U.S. tariffs add uncertainty to Canada’s economic recovery.

But some analysts question the data — with more questions being asked about how much weight to put on current U.S. numbers. These questions trace back to the White House’s own conflict with its statistics agency.

Here’s what triggered the swing, why the U.S. side comes with an asterisk and what a softer loonie means for your travel budget, your shopping cart and your investments.

Why Canada’s jobs report sank, while the U.S. jobs market soared

When receiving the latest jobs data, it appears that Canada’s job losses were broad. Business and support services cut 20,000 positions, public administration lost 8,800 and natural resources and utilities each shed jobs too, according to the Statistics Canada report.

Manufacturing was the lone bright spot, adding 22,000 jobs, mostly in Ontario.

The unemployment rate held at 6.4%, but the employment rate slipped to 60.8%, and wage growth cooled to 2.0% year over year — the slowest pace since 2017, outside the pandemic.

South of the border, the story was flipped.

U.S. employers added 162,000 jobs in August, blowing past the roughly 53,000 to 56,000 economists had forecast, while the unemployment rate held at 4.1%, according to data released by the U.S. Bureau of Labor Statistics. Most of these job gains were concentrated in food services and local government education.

The divergence between Canada and the U.S. job market — showing how one economy is cooling, while the other is apparently accelerating — is exactly the kind of gap currency traders punish.

A weaker Canadian labour market lowers the odds the economy can absorb higher rates, while a stronger U.S. dollar reduces pressure on the Federal Reserve to cut rates.

As a result, money moves toward the better growth story, and this week that was the U.S. dollar.

Why the strong U.S. number comes with a caveat

The same agency behind Friday’s blockbuster number has spent the past year under unusual political pressure. President Trump fired Bureau of Labor Statistics commissioner Erika McEntarfer in August 2025 after a weak jobs report included large downward revisions, accusing her — without evidence — of manipulating the data. Economists across the political spectrum, including a BLS commissioner from Trump’s own first term, said rigging the report that way would be virtually impossible given how many people compile it.

These days, the bigger issue isn’t a conspiracy — it’s capacity. The agency has faced shrinking budgets and scaled-back data collection, and survey response rates have declined for years, both of which can make revisions larger and more volatile.