0 views
OTTAWA — Canada’s labour market weakened again in September, shedding a net 68,300 jobs and pushing the unemployment rate up to 6.5 per cent, according to figures released on Friday.
The drop followed a decline of 41,700 jobs in August and surprised forecasters, who had expected a small gain. With September’s result, Canada has lost jobs on a net basis so far this year, a sharp contrast with the stronger hiring recorded in the same period of 2025.
September was the first full month after a new round of United States tariffs took effect against Canada, which has kept trade exposure at the centre of the economic debate. Manufacturing, a sector partly exposed to those tariffs, lost a net 12,700 jobs in the month, according to the data.
The largest losses, however, were in the public sector, particularly health care, social assistance and education. Analysts linked part of that weakness to the federal government’s cuts to international student permits, which have reduced demand across colleges, universities and the services that surround them. Job losses were split almost evenly between full-time and part-time positions.
The numbers shift the conversation around the Bank of Canada. Money markets are no longer pricing in a rate increase this month, after expectations of a quarter-point rise had edged higher, while a December increase is still expected by many traders. Economists cautioned that higher energy prices could feed into other categories of inflation this fall, complicating the central bank’s path even as employment softens.
One Desjardins strategist said in a note that the recent deterioration in the labour market would likely keep policymakers on hold later this month, while leaving open the possibility of tighter policy if price pressures broaden.
For workers, the immediate story is simpler: fewer postings, longer searches and a public sector that is no longer absorbing the losses seen elsewhere. Whether September proves to be a trough or the start of a longer slide will depend heavily on trade decisions made outside Canada’s borders — and on how employers respond in the final quarter of the year.
