In September, Canada experienced a decline of 68,000 jobs, 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 level seen at the beginning of 2026.
This decrease in employment defied expectations, with economists anticipating a gain of 9,200 jobs for the month. This trend follows the unexpected loss of 42,000 jobs in August, ending a period of strong job market performance.
Despite the recent setbacks, data from Statistics Canada had shown a positive trend in employment prior to the two consecutive declines. Between April and July, 181,000 jobs were added, resulting in a net increase of 95,000 positions compared to a year ago.
BMO’s chief economist, Doug Porter, highlighted the volatility of job figures, noting that consecutive months of substantial job losses are rare. He described the results as disappointing, suggesting a struggling economy in the early fall.
The decline in jobs was observed across various sectors, with educational services, health care, social assistance, and manufacturing leading the losses. However, there was a slight offset by an increase in “other services” employment, which includes fields like repair and maintenance.
Regarding the drop in education jobs, particularly in Quebec, Porter mentioned that it could be a temporary fluctuation or indicative of underlying sector weakness due to a decrease in international student enrollment.
CIBC’s senior economist, Andrew Grantham, pointed out that while some data volatility may have influenced the poor report, losses in the manufacturing sector could be linked to the impact of new tariffs implemented in August.
Statistics Canada noted that job losses affected both full-time and part-time positions, primarily concentrated in the public sector, which saw a reduction of 70,000 roles in the month. In contrast, the private sector added some jobs, offering a glimmer of positivity amid the overall decline.
The decline in employment was particularly notable among youth aged 15 to 24, accounting for 48,000 job losses, while core-aged women (25-54) also experienced a decrease of 28,000 positions.
Provincially, Quebec led in job losses with 49,000 positions shed, followed by British Columbia with 20,000 fewer jobs. Alberta, however, added 23,000 jobs during the same period.
The recent job data will influence the Bank of Canada’s upcoming interest rate decision on Oct. 28. Grantham suggested that the decline in job numbers, along with data volatility, is likely to prompt the Bank of Canada to maintain interest rates unchanged for the remainder of the year, given the impact of new U.S. tariffs and the overall economic conditions.