Canada sheds 68,000 jobs in September as unemployment rises to 6.5 per cent ahead of the Bank of Canada’s Oct. 28 decision

Canada lost 68,000 jobs in September and the unemployment rate edged up to 6.5 per cent, Statistics Canada reported, marking a second consecutive monthly decline before the Bank of Canada’s next interest-rate decision. The employment rate fell 0.2 percentage points to 60.6 per cent. Losses were split between full-time (35,000) and part-time (33,000) work after an August drop of 42,000 positions.

The agency said the decline was concentrated among youth aged 15 to 24 (48,000 fewer jobs) and women aged 25 to 54 (28,000). Educational services fell by 35,000, health care and social assistance by 23,000 and manufacturing by 13,000, while “other services” rose by 17,000. Quebec lost 49,000 jobs and British Columbia 20,000, while Alberta added 23,000. On a year-over-year basis, employment was still up 95,000, or 0.5 per cent.

Public-sector employment dropped 70,000 in September — a fourth straight monthly decline — and was down 119,000 from a year earlier, Statistics Canada said, with much of the year-over-year weakness tied to educational services. Private-sector payrolls were little changed on the month but up 163,000 from a year earlier. Average hourly wages among employees rose 2.3 per cent year over year to $37.64.

CBC News said the September figures bucked economists’ expectations for a gain of about 9,200 jobs and followed a hot streak of 181,000 positions added between April and July. BMO chief economist Doug Porter called the report disappointing. “There’s no question, this is a disappointing result,” Porter said. “It does suggest the economy was struggling in the early fall.”

CIBC senior economist Andrew Grantham told CBC that manufacturing losses could reflect new tariffs that took effect in August, while arguing the soft labour data supports keeping rates on hold for the rest of the year. The Financial Post quoted Desjardins strategist Royce Mendes on a “severe” drop in hours worked and said Desjardins expects the Bank of Canada to hold at its Oct. 28 meeting, even as some analysts still see inflation risks from energy and food.

The Bank of Canada’s overnight rate target has stood at 2.25 per cent since its Sept. 2 decision, according to the bank’s policy interest rate history, unchanged across seven consecutive settings listed for 2026. The bank’s upcoming Oct. 28 announcement is scheduled for 9:45 a.m. ET and will include a new Monetary Policy Report with updated inflation and growth projections.

Porter told the Financial Post that two months of large declines are unusual and that more than half of September’s drop came from education, which can raise seasonal-adjustment questions when schools restart, though he also flagged fewer international students as a possible structural factor. Markets and economists will now weigh the weaker jobs data against still-elevated inflation readings before the late-October decision.

This article is general information and is not financial or investment advice.

Sources: Statistics Canada: Labour Force Survey, September 2026 (Oct. 9, 2026); CBC News (Oct. 9, 2026); Financial Post (Oct. 9, 2026); Bank of Canada: Policy interest rate; Bank of Canada: Interest Rate Announcement and Monetary Policy Report (Oct. 28, 2026).