Canada loses 68,000 jobs in September as unemployment rate rises to 6.5%
Canadian employment fell by 68,000 in September 2026, the second consecutive monthly decline, driven by losses in the public sector and among youth and core-aged women. The unemployment rate edged up to 6.5%, while labour force participation dropped to its lowest non-pandemic level since 1997.
Canada's labour market contracted for a second straight month in September 2026, shedding 68,000 jobs (-0.3%) following a loss of 42,000 positions in August. Economists had predicted employers would add 9,200 jobs during the month.
The unemployment rate rose 0.1 percentage points to 6.5%, returning to levels last seen in January 2026. Job losses were nearly evenly split between full-time work, which declined by 35,000, and part-time work, which fell by 33,000.
The labour force participation rate dropped 0.2 percentage points to 64.8%. Excluding the pandemic year of 2020, this marks the lowest participation rate recorded since December 1997.
Employment declines were concentrated among specific demographic groups. Youth aged 15 to 24 lost 48,000 jobs (-1.8%), though their unemployment rate remained relatively unchanged due to a shrinking labour pool. Employment for core-aged women (25 to 54) decreased by 28,000 (-0.4%), pushing their unemployment rate up to 5.3%.
The public sector experienced significant contraction, with the number of public employees falling by 70,000 (-1.5%). This represents the fourth consecutive monthly decline for the sector. Within specific industries, educational services lost 35,000 jobs (-2.2%), health care and social assistance shed 23,000 positions (-0.8%), and manufacturing employment fell by 13,000 (-0.7%). CIBC senior economist Andrew Grantham suggested that data volatility was likely partly to blame for the decline in education services. Conversely, employment in "other services" increased by 17,000 (+2.1%).
Geographically, Quebec recorded the largest provincial decline, losing 49,000 jobs (-1.1%), while British Columbia saw a decrease of 20,000 positions (-0.7%). Alberta moved against the national trend, gaining 23,000 jobs (+0.9%).
Despite the overall drop in employment, average hourly wages rose 2.3% year-over-year to $37.64.