Canada saw a decline of 68,000 jobs in September, as reported by Statistics Canada, marking the second consecutive month of job losses. The unemployment rate rose by 0.1 percentage points to reach 6.5%, the same level seen at the beginning of 2026.
This unexpected decrease contrasts with economists’ expectations, who had predicted a gain of 9,200 jobs for September. The previous month also saw a surprising loss of 42,000 jobs, interrupting a positive trend in the labor market.
Statistics Canada data had shown a positive trend in employment prior to the recent declines, with 181,000 jobs added between April and July. Despite the setbacks, employment remains higher than a year ago, with 95,000 more positions.
BMO’s chief economist, Doug Porter, highlighted the volatility of job figures, noting that consecutive months of significant job losses are uncommon. He expressed disappointment in the recent results, suggesting a struggling economy during the early fall.
The decline in jobs was observed in sectors such as educational services, health care, and manufacturing, while “other services,” including repair and maintenance, saw an increase in workers. Porter suggested that the drop in education jobs, particularly in Quebec, may reflect a temporary situation or indicate underlying weakness in the sector due to fewer international students.
CIBC’s senior economist, Andrew Grantham, attributed the poor report to data volatility, pointing out that manufacturing losses might be linked to the impact of new tariffs that came into effect in August.
The job losses were spread between full- and part-time work, with a concentration in the public sector which shed 70,000 positions in the month. Conversely, the private sector added some jobs, providing a silver lining in the report.
Youth aged 15 to 24 bore the brunt of the job losses, accounting for 48,000 lost positions. The unemployment rate for this group remained at 13% as the pool of young workers decreased. Core-aged women (25-54 years old) also saw a reduction of 28,000 positions, with more women in this age group actively seeking work.
Quebec led the provinces in job losses with 49,000 positions lost, followed by British Columbia with 20,000 fewer jobs. In contrast, Alberta added 23,000 jobs during the same period.
The latest job data will influence the Bank of Canada’s upcoming interest rate decision on Oct. 28. Grantham anticipates that the job market weakness, despite being partly due to data volatility, will likely prompt the Bank of Canada to maintain the current interest rates at the remaining meetings this year.
