Canada Jobless Rate Edges Up With Another Drop in Employment — Update

By Robb M. Stewart

OTTAWA--Canada's economy unexpectedly shed jobs for a second month running, nudging the unemployment rate higher.

Employers in the country cut 68,300 jobs in September, Statistics Canada said Friday.

That pushed the unemployment rate up 0.1 percentage point to 6.5%, returning it to where it stood in June and at the start of the year, but below the recent peak of 6.9% hit in April.

September's fall in the employment was the steepest since February, and was split between full- and part-time work. Building on the 41,700 jobs lost in August, it breaks what had been a trend higher with roughly 181,000 jobs added to the economy between April and July.

Economists had been expecting a recovery with a thin 9,000 increase in employment for the month.

September is the first full month since President Trump applied new 50% tariffs to the equivalent of about 5% of Canadian exports to the U.S. Bank of Canada Gov. Tiff Macklem has warned that fresh uncertainty over trade could prompt businesses to delay investment and hiring decisions, though the hit to the economy from the latest tariffs is likely to be small overall and concentrated on affected sectors.

Job numbers were down sharply in educational services and among health care and social assistance workers.

Jobs in manufacturing, which has been hit hard by tariffs, fell by a modest 12,700 during September. Manufacturing job numbers remain up about 10,000 in 2026 after a recent recovery, but are down roughly 40,000 from a January 2025 peak before the first round of U.S. tariffs came into effect.

When calculated using U.S. Labor Department methodology, Canada's unemployment rate climbed to 5.6% after holding at 5.3% for three months.

The layoff rate in Canada stood at 0.7% last month, similar to the 0.6% rate year earlier and the average ahead of the Covid-19 pandemic from 2017 to 2019.

Still, the job-funding rate cooled to 30.6% in September from 32.8% a year prior and a pre-pandemic average of 36.5%. And the participation rate--the proportion of the working-age population who were employed or looking for work--slipped 0.2% percentage point to 68.4%, the lowest level outside the pandemic since December 1997.

September's drop in employment was concentrated among youth 15 to 24, as well as among women aged 25 to 54.

Public-sector jobs fell by 70,000, a fourth consecutive decline, while the number of workers in the private sector was little changed for a second month in a row, rising by 24,100. The ranks of the self-employed dropped by 22,500, after rising between April and July.

Wage growth also picked up for the month. Average hourly wages advanced by 2.3% after cooling to 2% growth the month before. Average wages for permanent employees rose similarly, in line with the consensus forecast of economists.

Canada's employment rate, the number of employed people as a percentage of the population aged 15 years and older, slipped to 60.6% from 60.8% in August. The working-age population rose by 23,700 last month and was up 183,000 on last year.

Write to Robb M. Stewart robb.stewart@wsj.com

(END) Dow Jones Newswires

October 09, 2026 08:54 ET (12:54 GMT)