Canada loses 68,000 jobs in September, nowhere near the +9,200 gain forecasted
Employment fell 68,000 in September and unemployment rose to 6.5%, Statistics Canada said on Friday, October 9, 2026, ahead of the Bank of Canada's October 28 rate decision.
Key takeaways
Canada lost 68,000 jobs in September, while the unemployment rate rose from 6.4% to 6.5%, said Statistics Canada Friday morning.
The numbers came in well short of expectations: Economists had projected employers to add 9,200 jobs.
It was the second monthly decline in a row: Canada's economy had lost 42,000 jobs in August. Cumulatively, Canadian employers shed some 110,000 jobs over the last two months.
Public sector jobs represented the lion's share of the losses: Public employment fell by 70,000 - the fourth month of public sector declines in a row. Educational services lost 35,000 jobs, health care and social assistance lost 23,000, and manufacturing lost 13,000. Self-employment also fell by 22,500. Over the past year the public sector has shed 119,000 jobs, most of them in education, the agency said.
Private employers overall represented the one bright spot in the September jobs report, adding 24,100 jobs for the month.
The labor participation rate, the share of people working or looking for work, fell to 64.8%.
Employment among people aged 15 to 24 fell by 48,000, most of the national loss. People who stop looking for work are not counted as unemployed. The number of young people working or looking fell by 50,000, so their unemployment rate was little changed at 13%.
On September 2, before these two declines were published, Governor Tiff Macklem said that conditions had been improving, though labor markets remained subdued.
The report cuts against a rate increase
The Bank also said the risk of higher inflation had increased, with the conflict in the Middle East keeping energy prices high, and that it was prepared to adjust policy as needed. The central bank has held the overnight rate - the main policy rat4e - steady at 2.25% for the past year, since it cut rates in 2025.
This is the last jobs report before the Bank of Canada announces its interest-rate decision on Wednesday, October 28, at 9:45 a.m. Eastern time, alongside a new forecast.
While higher inflation pressures normally portend an interest rate increase, all other things being equal, the disappointing jobs report undercuts arguments for a rate hike for the time being.
In other developments, the Canadian dollar fell 0.44%, to 69.99 US cents after the jobs report was released at 8:30 a.m. Eastern time. One US dollar bought 1.4287 Canadian dollars.
Two-year government bond yields reversed early moves and fell 9.5 basis points, to 2.410%. A basis point is a hundredth of a percentage point.
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Frequently asked questions
How far did September employment miss the forecast?
Employment fell by 68,000, while economists had expected employers to add 9,200 jobs.
What happened to the unemployment rate?
It rose to 6.5% from 6.4%, the only part of the forecast that matched.
Were the job losses in the private sector?
No: public-sector employment fell by 70,000, private employers added 24,100 jobs, and self-employment fell by 22,500.
Does the report rule out a Bank of Canada rate rise on October 28?
No: Friday weakened the labour-market case for a higher rate, but the energy-price risk is unchanged and a rise is still possible.
