Canada’s economy lost 68,000 jobs in September, marking the second consecutive month of declines and pushing the national unemployment rate up to 6.5 per cent. This unexpected contraction significantly missed economist forecasts, which had predicted a modest gain of 9,200 positions.

Which sectors saw the most impact?

The recent downturn was largely driven by the public sector, which saw a decline of 70,000 employees. Job losses were distributed relatively evenly between full-time and part-time roles. Key industry declines included:

  • Educational services: 35,000 jobs lost
  • Health care and social assistance: 23,000 jobs lost
  • Manufacturing: 13,000 jobs lost

In contrast, the repair, maintenance, and personal services segment grew by 17,000 positions. Regionally, Quebec experienced a significant loss of 49,000 jobs, while Ontario and British Columbia each shed 20,000. Alberta was the outlier, adding 23,000 roles.

What is the broader economic context?

The September figures represent the steepest single-month decline since February. This follows a loss of 42,000 roles in August, meaning the economy has shed roughly 110,000 jobs over the last two months. This recent weakness has offset a period of growth seen earlier this year when employers added 181,000 positions between April and July.

While the downturn is significant, analysts suggest the cause may be specific to certain sectors. Daniel Hyun, a senior economist at KPMG Canada, noted that because most losses came from non-trade-facing sectors, it would be "premature to blame tariffs for the weakness."

Youth aged 15 to 24 were the hardest hit, accounting for 48,000 of the lost positions. Despite these setbacks, average hourly wages rose 2.3 per cent annually, a slight increase from the 2.0 per cent growth seen in August. This data arrives just before the Bank of Canada's next interest rate decision on October 28.

FAQ

How much did the unemployment rate change?

The unemployment rate rose to 6.5 per cent in September, up from 6.4 per cent in August.

Was the private sector affected?

Private sector employment remained relatively stable, showing little change during the month.