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Canada lost 68,000 jobs in September, according to Statistics Canada, marking a second straight month of losses.
The unemployment rate ticked up by 0.1 percentage points to 6.5 per cent, which is where it stood at the start of 2026.
Economists polled ahead of the release had predicted employers added 9,200 positions in September.
The decline follows 42,000 job losses in August, which came as a surprise to economists and snapped a hot streak for the labour market.
Before the two monthly declines, Statistics Canada data showed employment trending upward, with 181,000 jobs added between April and July. Employment is still up compared to a year ago by 95,000 positions.
Statistics Canada says job losses were split between full- and part-time work and were concentrated in the public sector.
The decline was concentrated in youth aged 15 to 24, who accounted for 48,000 job losses, according to the data agency. But the pool of young workers also shrank in September, leaving the unemployment rate for that group relatively unchanged at 13 per cent.
Core-aged women, between 25 and 54 years old, also held 28,000 fewer positions, and the number of women in that age group looking for work increased.
Quebec led the job losses by province, with 49,000 jobs lost in the month, while B.C. followed with 20,000 fewer jobs. Alberta, on the other hand, added 23,000 positions.
By sector, educational services, health care and social assistance, and manufacturing led the declines. More workers in “other services,” which includes things like repair and maintenance, offset the losses.
WATCH | Canada’s economy still resilient, but U.S. trade war taking its toll:
Canada’s economy still resilient, but U.S. trade war taking its toll
Canada’s economy has shown resilience in the face of punishing U.S. tariffs, but new import bans on a range of Canadian products are creating further drag. Accounting firm Deloitte has lowered its growth forecast for next year by 20 per cent.
CIBC senior economist Andrew Grantham says the declines in education services, which tend to be in flux at the start of the school year, indicate data volatility was likely partly to blame for the monthly decline.
But he says losses in manufacturing could be a sign that new tariffs, which came into effect in August, are taking a toll.
“Overall, while the weakness in today’s employment data is likely more a reflection of data volatility than the impact of new U.S. tariffs, it does support our call that the Bank of Canada will remain patient and keep interest rates on hold at the two remaining meetings this year,” Grantham wrote in a note to investors.
The jobs data will be the Bank of Canada’s last look at the labour market before its next interest rate decision on Oct. 28.