Canada experienced a loss of 68,000 jobs in September, as reported by Statistics Canada, marking the second consecutive month of declines. The unemployment rate increased by 0.1 percentage points to 6.5%, aligning with the rate at the beginning of 2026.
Economists had anticipated a gain of 9,200 jobs for September, contrary to the actual figures. This follows a surprise loss of 42,000 jobs in August, halting a period of robust job growth. Prior to these declines, data from Statistics Canada indicated a positive trend in employment, with 181,000 jobs added between April and July. Despite the recent setbacks, employment remains higher than a year ago by 95,000 positions.
BMO’s chief economist, Doug Porter, highlighted the volatility of job figures, noting that consecutive months of substantial job losses are uncommon. The decline in jobs was observed in sectors such as educational services, health care, and manufacturing, while “other services” saw an increase, offsetting some of the losses.
Porter suggested that the drop in education jobs, particularly in Quebec, may be temporary or indicative of broader sectoral weakness due to reduced international student enrollment. CIBC’s senior economist, Andrew Grantham, mentioned that while some data fluctuations may have influenced the negative report, manufacturing losses could be linked to the impact of new tariffs implemented in August.
The job losses were split between full-time and part-time positions, with a concentration in the public sector, which shed 70,000 jobs in the month. The private sector, however, showed some growth, providing a positive aspect amidst the overall decline. The decline in job numbers primarily affected youth aged 15 to 24, with a significant loss of 48,000 jobs.
Quebec led the provinces in job losses, with 49,000 fewer jobs, followed by British Columbia with 20,000 job losses. Conversely, Alberta added 23,000 positions during the same period. The latest job data will influence the Bank of Canada’s upcoming interest rate decision on October 28, with experts predicting that the recent job losses may deter any immediate rate adjustments.
Grantham emphasized that while the job market fluctuations may not solely be due to new tariffs, they are likely to influence the Bank of Canada’s stance on interest rates for the remainder of the year.
