Canada Loses 68,000 Jobs in September as Unemployment Rises to 6.5%
Canada's economy shed 68,000 jobs in September 2026, the second consecutive month of declines, pushing the unemployment rate to 6.5%. Losses were concentrated in educational services and among youth and women, setting the stage for the Bank of Canada's October 28 interest rate decision.
Canada’s labour market contracted sharply in September 2026, losing 68,000 jobs and marking the steepest single-month decline since February. The losses represent the second consecutive month of employment contraction, following a drop of 42,000 jobs in August, and pushed the national unemployment rate up to 6.5%, returning it to levels last seen in January.
The job losses were nearly evenly split between full-time and part-time work. According to Global News, full-time positions accounted for 35,000 of the losses, while part-time roles made up 33,000. The educational services sector led the overall decline with a loss of 35,000 positions. Health and social assistance lost 23,000 jobs, and manufacturing shed 13,000, contributing to a four-month streak of public sector employment declines. In contrast, the private sector showed signs of stability, and repair, maintenance, and household services added 17,000 jobs.
Demographically, younger workers and core-age women bore the brunt of the downturn. Youth aged 15 to 24 lost 48,000 jobs, driving the youth unemployment rate to 13%. Women aged 25 to 54 saw a decline of 28,000 positions.
Provincial data revealed significant regional disparities. Quebec recorded the heaviest losses, shedding 49,000 jobs. Ontario and British Columbia each lost 20,000 jobs, while Alberta bucked the national trend by adding 23,000 positions.
Despite the widespread job cuts, average hourly wages rose 2.3% on an annual basis in September, accelerating from a 2% pace in August.
Economists generally did not attribute the September job losses primarily to trade tariffs or ongoing trade dispute tensions. Analysts noted that the majority of the declines occurred in non-trade-facing sectors rather than those directly exposed to international commerce.
The September report serves as the final major economic indicator before the Bank of Canada’s next interest rate decision on October 28. The central bank has held its policy rate at 2.25% for nearly a year. Given the weak labour market data, analysts widely expect the Bank of Canada to hold rates steady at its upcoming meeting, reducing the likelihood of an immediate hike. However, some forecasts, including projections from KPMG Canada, point to a potential increase to a 2.5% policy rate by the end of the year.