Canada Loses 68,300 Jobs in September vs +9,200 Expected
Key Takeaways
- •Canada's labor market lost 68,300 jobs in September versus expectations for a 9,200 gain, bringing cumulative declines over two months to roughly 110,000.
- •The unemployment rate remained steady at 6.5% only because the participation rate dropped 0.2 percentage points to 64.8%, as workers exited the labor force.
- •Wage growth for permanent employees accelerated to 2.3% year over year from 2.0%, a signal that could influence the Bank of Canada's interest-rate decisions.
- •Public sector payrolls fell 70,000, educational services dropped 35,300, and healthcare declined 23,100 in its first decrease in nearly four years, with Quebec accounting for nearly 50,000 of the losses.
- •The Canadian dollar weakened after the data, with USD/CAD rising from 1.4232 before the release to 1.4293 afterward amid an intensifying US-Canada trade conflict.
Canada's labor market lost 68,300 jobs in September, far below expectations for a gain of 9,200 and marking a second consecutive month of large declines that now total roughly 110,000. The prior month saw a loss of 41,700 jobs, according to the August employment report.
Key details for September:
- Employment change: -68.3K vs +9.2K expected; prior -41.7K
- Unemployment rate: 6.5% vs 6.5% expected; prior 6.4%
- Full-time employment change: -35.4K vs prior -35.9K
- Part-time employment change: -32.9K vs prior +5.8K
- Participation rate: 64.8% vs prior 65.0%
- Average hourly wages for permanent employees: +2.3% YoY vs +2.0% prior
The unemployment rate held steady at 6.5%, but only because the participation rate fell 0.2 percentage points to 64.8%. Wage growth for permanent employees accelerated to 2.3% year over year from 2.0% — a pickup likely to make the Bank of Canada uncomfortable, since wage pressure is one of the gauges central banks watch most closely when weighing interest-rate decisions.
The data arrived as the US-Canada trade war picked up in September, which appears to have begun biting into the broader economy. Employment figures are among the most closely watched gauges of economic momentum, because sustained job losses tend to feed through to household spending and overall growth.
In currency markets, USD/CAD traded at 1.4232 ahead of the release and shot up to 1.4293 afterward.
Beneath the headline, public sector employment fell 70,000, while private sector employment rose 24,100 and self-employment declined 22,500. Educational services payrolls dropped 35,300 — a category where seasonal adjustments are notoriously difficult at this time of year. The losses were also concentrated in Quebec, which shed nearly 50,000 jobs.
Canadian youth — who paid the price during the pandemic — are now paying it again in the jobs market. Youth employment fell 48,100, but the youth labor force shrank by 50,000, meaning young workers exited the labor force rather than showing up as unemployed. That pattern is consistent with back-to-school timing and seasonal-adjustment quirks rather than mass firing. The 12.9% youth unemployment rate, while elevated, is still 1.6 percentage points better than a year ago.
Healthcare was the other big loser, with employment down 23,100 — the first drop in nearly four years.
Statistics Canada publishes the Labour Force Survey monthly, so the October report — due in early November — will show whether the two-month slide extends into the fourth quarter, with the readings set to feed into the Bank of Canada's deliberations on interest rates.
This article is based on reporting by ForexLive, published October 9, 2026. Source: Canada September employment change -68.3K vs +9.2K expected
