The economy lost 40,000 jobs last month, Statistics Canada reported in its latest labour force survey, with the losses concentrated in the public sector.
The report says employment gains in professional, scientific and technical services were offset by declines in education services and construction.
CIBC says the decline of 50,000 jobs in education likely represents seasonal challenges and may reverse later.
The Bank of Canada is watching for any developments in the economy as it raises interest rates to quell inflation. An economic slowdown is expected as interest rates continue to climb.
The employment declines were primarily concentrated among young women aged 15 to 24 and people between the ages of 55 to 64.
Average hourly wages in August rose 5.4 percent compared with a year ago, up from 5.2 percent in July.
Statistics Canada warns employers are likely to continue facing recruitment challenges as many Canadians reach retirement age.
In August, 307,000 Canadians had left their job to retire in the last year, compared with 233,000 a year ago.
The labour force survey also asked workers about the job features they consider to be essential or very important. The No. 1 factor identified by respondents was salary and benefits, with 85.4 percent of them ranking it the most important factor.
As more people head to the office, Statistics Canada says working exclusively from home is declining while the proportion of people working hybrid is rising.