Statistics Canada says the economy created 26,200 net new jobs in the month compared with a loss of 31,200 in the previous month.
However, even with the increase in the number of jobs the unemployment rate crept up to 7.0 per cent compared with 6.9 per cent in July as more people entered the labour force and started looking for work.
Economists had expected a gain a 15,000 jobs and the unemployment rate to hold steady at 6.9 per cent, according to Thomson Reuters.
The increase in the number of jobs in August was due to a gain of 52,200 full-time jobs, offset by a loss of 26,000 part-time positions.
The number of jobs rose in Quebec and Newfoundland and Labrador, while it was little changed in most other provinces except New Brunswick, where the number of jobs fell.
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OTTAWA - The Canadian job market rebounded in August, gaining back much of the ground lost in a big drop in July.