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 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 positions in September, but the actual figures were contrary to their predictions. This follows the unexpected loss of 42,000 jobs in August, interrupting a positive trend in the labor market.
Prior to the recent declines, data from Statistics Canada had shown a positive trend in employment, with 181,000 jobs added between April and July. Despite the recent setbacks, there have been 95,000 more jobs created compared to the previous year.
BMO’s chief economist, Doug Porter, highlighted the volatility of job figures, noting that consecutive months of significant job losses are uncommon. He described the results as disappointing, indicating potential economic challenges in the early fall.
The decline in jobs was notable in sectors such as educational services, health care, and manufacturing, while “other services,” including repair and maintenance, saw an increase in employment. The decrease in education jobs, particularly in Quebec, could be a temporary fluctuation or a sign of weakness in the sector due to a decline in international student enrollment.
CIBC’s senior economist, Andrew Grantham, suggested that while some data fluctuations may have influenced the poor report, losses in the manufacturing sector could be attributed to the impact of new tariffs implemented in August.
Statistics Canada revealed that job losses affected both full-time and part-time positions, primarily in the public sector which shed 70,000 roles in the month. On the bright side, the private sector managed to add some jobs and remain stable.
Youth aged 15 to 24 experienced the most significant job losses, accounting for 48,000 of the total decline. Despite this, the unemployment rate for this group remained relatively unchanged at 13%. Additionally, core-aged women (25 to 54 years old) saw a decrease of 28,000 jobs, with more women in this age group actively seeking employment.
Quebec led the provinces in job losses, with 49,000 positions cut, 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 October 28. Analysts predict that the recent job losses may deter the bank from making any immediate adjustments to interest rates.
In a note to investors, Grantham emphasized that while the weak employment data may be partially due to data volatility rather than the impact of new tariffs, it supports the expectation that the Bank of Canada will maintain its current interest rates for the remainder of the year.
