Canada experienced a decline of 68,000 jobs in September, as reported by Statistics Canada, marking the second consecutive month of job losses. The unemployment rate inched up by 0.1 percentage points to 6.5%, aligning with the rate at the beginning of 2026.
Contrary to economists’ expectations of a gain of 9,200 jobs in September, the actual numbers were disappointing. August also witnessed an unexpected loss of 42,000 jobs, halting the previous momentum in the labor market.
Despite the recent setbacks, employment had been on an upward trend, with 181,000 jobs added from April to July. In comparison to the previous year, there are still 95,000 more positions available.
BMO’s chief economist, Doug Porter, acknowledged the volatility of job figures, emphasizing the rarity of consecutive months with such significant job losses. The decline was primarily observed in educational services, health care, social assistance, and manufacturing sectors, while “other services” like repair and maintenance saw some offsetting gains.
The decrease in education jobs, particularly in Quebec, may be a temporary fluctuation or a signal of sectoral weakness due to fewer international students. CIBC’s senior economist, Andrew Grantham, noted that the manufacturing losses could be attributed to the impact of new tariffs imposed in August.
The job losses were spread across both full-time and part-time positions, with a notable decline in the public sector, shedding 70,000 roles. However, the private sector managed to add some jobs, providing a slight positive outlook amid the overall decline.
Youth aged 15 to 24 bore the brunt of the job losses, accounting for 48,000 lost jobs, while core-aged women (25-54 years) also experienced a decrease in employment. Quebec led the provinces in job losses, with 49,000 positions lost, followed by B.C. with 20,000 fewer jobs. In contrast, Alberta added 23,000 jobs during the same period.
The job market data will influence the Bank of Canada’s upcoming interest rate decision on Oct. 28. CIBC’s Grantham predicts that the current job market scenario, influenced by data volatility and external factors like new tariffs, will likely prompt the Bank of Canada to maintain interest rates in the near future.
