Canada experienced a loss 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%, the same rate recorded at the beginning of 2026. Economists had anticipated a gain of 9,200 jobs for the month.
The decline in employment follows a previous loss of 42,000 jobs in August, ending a period of positive growth in the labor market. Prior to these setbacks, data from Statistics Canada had shown a positive trend, with 181,000 jobs added between April and July, resulting in a net gain of 95,000 jobs compared to the previous year.
The job losses were distributed across full-time and part-time positions, with a notable impact on the public sector. Youth aged 15 to 24 bore the brunt of the losses, accounting for 48,000 job cuts, although the overall pool of young workers also decreased, keeping the unemployment rate for this group at 13%. Additionally, core-aged women (25 to 54 years old) saw a decrease of 28,000 positions, with more women in this age group actively seeking employment.
Quebec led the provinces in job losses with 49,000 positions shed, followed by British Columbia with 20,000 fewer jobs. In contrast, Alberta added 23,000 jobs during the same period. The sectors most affected by job declines were educational services, health care and social assistance, and manufacturing, while the category of “other services,” including repair and maintenance, saw a slight increase to offset some of the losses.
CIBC senior economist Andrew Grantham noted that fluctuations in education services, typical at the beginning of the school year, likely contributed to the monthly decline due to data volatility. However, the losses in the manufacturing sector may reflect the impact of new tariffs imposed in August.
The latest employment data will inform the Bank of Canada’s decision on interest rates at its upcoming meeting on Oct. 28. Grantham suggested that despite the weak employment figures, driven partly by data volatility and potential tariff effects, the Bank of Canada is likely to maintain interest rates at the current level in the remaining meetings of the year.