Statistics Canada says the economy added 90,000 jobs in August, the third consecutive monthly increase.
The unemployment rate fell to 7.1 per cent for the month, compared with 7.5 per cent in July, bringing the rate to the lowest level since the onset of the COVID-19 pandemic last year.
The announcement topped consensus expectations and came after even stronger gains in the prior two months, wrote Royce Mendes, an economist with CIBC, in a research note. But he also pointed out some issues.
"There were a few flies in the ointment, with hours worked essentially unchanged and the participation rate falling."
Service sector leads recovery
Gains were concentrated in full-time work and in the hard-hit service sector, led by gains in accommodation and food services.
Statistics Canada says gains in the service sector pushed employment there back to pre-pandemic levels for the first time, although some areas are still lagging, such as retail and food services.
The agency says overall employment is within 156,000 jobs, or 0.8 per cent, of the level recorded in February 2020, before the onset of the pandemic.
That's the closest the country has come to recouping all the jobs lost during the first wave of COVID-19.
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