The unemployment rate in Canada reached 5.4 percent in August, rising for the first time in seven months. The Canadian Statistics Agency reported in the latest labor force survey that the economy lost 40,000 jobs last month.

In July, the unemployment rate was 4.9 percent, the lowest rate since comparable data became available for the first time in 1976, with the report stating that employment gains in professional, scientific, and technical services were offset by declines in education services and construction. CIBC says that the 50,000 job decline in the education field likely represents seasonal challenges and may be reversed later.

The Bank of Canada is also monitoring any developments in the economy as an economic slowdown is expected with the continued rise of interest rates. Andrew Grantham, Chief Economist at CIBC, stated in an email: "With another labor force survey conducted before the (central bank) meeting in October, it is still likely that the interest rate will be raised at least once before a pause."

The decline in employment was mainly focused among young people aged 15 to 24 and those aged 55 to 64. The labor force participation rate remained generally steady, while the average hourly wages in August rose by 5.4 percent compared to last year, up from 5.2 percent in July.

The Canadian Statistics Agency warns that employers are likely to continue facing hiring challenges as many Canadians reach retirement age. In August, 307,000 Canadians left their jobs for retirement in the past year, compared to 233,000 the previous year.

The report also addressed unemployment among new immigrants who arrived in Canada in the past five years, with the unemployment rate for this population group being 7.6 percent, the lowest for any August since comparable data became available in 2006. However, it remains higher than the overall unemployment rate in Canada.

In the same context, the report found that the percentage of workers looking to leave their jobs is rising, according to the federal agency, with 11.9 percent of permanent employees planning to leave their jobs within the next twelve months, nearly double the rate in January.

For low-income earners, that rate was higher among workers whose average hourly wages were less than 20 percent in August, with about one in five saying they plan to leave their jobs.