Canada Unemployment Rate Rises to 6.5% as 68,000 Jobs Disappear
Canada lost 68,000 jobs in September, extending the labour market’s decline for a second month. The unemployment rate rose to 6.5 per cent from 6.4 per cent…
Canada’s labour market weakened again, adding pressure to the outlook for workers and interest rates. The canada unemployment rate rose to 6.5 per cent in September as employment fell by 68,000, Statistics Canada reported on Friday.
It was the second monthly decline in a row. The economy had shed 42,000 jobs in August, and September’s losses erased the job-market strength reported earlier in the summer, according to Douglas Porter, Bank of Montreal’s chief economist.
Porter said in a research note that “A second consecutive month of sizable job losses washes away the surprising strength reported in Canada’s job market through the early summer.” He said the Bank of Canada should maintain a watchful approach while employment weakens.
The report adds to uncertainty around the Bank of Canada’s next move. Its key interest rate is 2.25 per cent, and the bank’s next decision is on Oct. 28. The Globe and Mail reported that forecasters expect the bank to hold rates steady later this month, even as it is widely anticipated to resume increases in the coming months.
Public-sector losses led the decline
The public sector accounted for the largest drop in September, losing 70,000 positions. Half of those losses were attributed to education services in Quebec. Public-sector employment has declined for four consecutive months and is down 119,000 jobs year-over-year.
Quebec recorded the steepest regional fall, with employment down 49,000. British Columbia and Ontario each lost 20,000 jobs, while Manitoba shed 4,400. Alberta moved against the trend, adding 23,000 jobs. Newfoundland and Labrador and Prince Edward Island also posted gains.
Health care and social assistance recorded their first monthly employment decline since December, 2022. Manufacturing also lost jobs. Porter described the manufacturing drop as “an early warning of the weight from the amped-up trade tussle.”
The report lands as trade tensions weigh on the economy. The source says U.S. tariffs have created serious headwinds over the past couple of years, with new tariffs introduced in recent weeks and negotiations between Ottawa and Washington suspended since August.
That mix of falling employment and trade friction matters beyond the headline rate: job losses in public services and manufacturing can affect household income and hiring prospects, while uncertainty over borrowing costs shapes decisions by workers and employers. Andrew Hencic, a senior economist at Toronto-Dominion Bank, said the unemployment rate is expected to “tread water in coming months, as trade frictions and higher [interest] rates weigh on activity.” He also pointed to a steady employment rate in the private sector as a positive element in the report.
Different groups saw different outcomes
Women aged 25 to 54 faced a higher unemployment rate, which rose to 5.3 per cent from 5 per cent. The report attributed the increase both to fewer women in this group working and to more actively searching for a job. For men in the same age range, the rate edged down to 5.8 per cent.
Youth employment also fell. People aged 15 to 24 lost 48,000 jobs in September, marking a second consecutive monthly decline, although the unemployment rate for the group remained little changed at 13 per cent.
Royce Mendes, head of macro strategy at Desjardins, said the rise in unemployment “could have been worse, were it not for a drop in the participant rate to its lowest level in almost 30 years.” Statistics Canada put the labour participation rate at 64.8 per cent, its lowest level since December, 1997, excluding the early parts of the pandemic.
The agency attributed the longer-term participation trend to aging demographics. The source also said population growth has been meagre more recently, after strong immigration.
Canada’s September job losses totalled 68,000.
Source: theglobeandmail.com
