Canada’s labour market lost 68,000 jobs in September, marking a second straight monthly decline and pushing the unemployment rate to 6.5%, according to Statistics Canada’s latest Labour Force Survey.
Employment fell 0.3% in September, while the employment rate dropped 0.2 percentage points to 60.6%. The unemployment rate rose to 6.5% after sitting at 6.4% in July and August, returning to the same level recorded in January.
The September decline followed a loss of 42,000 jobs in August. Before those back-to-back declines, employment had risen by 181,000 from April to July. On a year-over-year basis, employment was still up by 95,000, or 0.5%, in September.
Full-time work fell by 35,000 positions, while part-time work fell by 33,000. Average hourly wages among employees rose 2.3% year over year to $37.64 on a not seasonally adjusted basis, following 2.0% growth in August.
The result was weaker than the small gain expected by economists in a Reuters poll, which had forecast a 9,200 job increase and a 6.5% unemployment rate.
The job-finding rate is the detail to watch
Statistics Canada’s data did not show a large jump in layoffs. The layoff rate was 0.7%, close to the 0.6% recorded a year earlier and to the 2017-to-2019 average.
The weaker point was re-employment. The job-finding rate fell to 30.6%, down from 32.8% a year earlier and below the 36.5% average from 2017 to 2019. That measure tracks the share of people who were unemployed in August and had found work by September.
For workers and employers, the figures point to a hiring market where open roles may be taking longer to secure, even if layoffs are not rising dramatically in the survey data.
Public-sector jobs carried much of the monthly decline
The number of public-sector employees fell by 70,000 in September, the fourth straight monthly decline. Compared with September 2025, public-sector employment was down by 119,000, with most of the drop tied to educational services.
Private-sector employment was little changed for a second month, but it was up 163,000 from a year earlier. Self-employment edged down by 23,000 in September but remained 51,000 above year-earlier levels.
Youth employment took the biggest hit
Employment among people aged 15 to 24 fell by 48,000, or 1.8%, in September. It was the second consecutive monthly decline for youth, bringing the two-month drop to 67,000.
The youth unemployment rate was little changed at 13.0% because the number of young people in the labour force also fell. Statistics Canada reported a 50,000 decline in the youth labour force for the month.
Among women aged 25 to 54, employment fell by 28,000 and the unemployment rate rose 0.3 percentage points to 5.3%. Employment among core-aged men held steady, while their unemployment rate fell to 5.8%.
Education, health care and manufacturing posted losses
By industry, educational services lost 35,000 jobs in September after seven months of little change. Employment in the sector was down 67,000 from a year earlier.
Health care and social assistance fell by 23,000, the sector’s first monthly decrease since December 2022. Despite that monthly drop, employment in health care and social assistance was still up 93,000 over the previous 12 months.
Manufacturing employment fell by 13,000 after gaining 22,000 in August. The other services category, which includes repair and maintenance as well as personal and household services, added 17,000 jobs.
Quebec and British Columbia led provincial losses
Employment fell by 49,000 in Quebec and by 20,000 in British Columbia. Manitoba also posted a smaller decline of 4,400.
Alberta moved the other way, adding 23,000 jobs in September and 76,000 over the previous 12 months. Newfoundland and Labrador added 1,800 jobs, while Prince Edward Island added 1,000.
Ontario employment edged down by 20,000 but remained 86,000 above year-earlier levels. The unemployment rate was little changed at 7.0% in Ontario, rose to 6.0% in Quebec and remained little changed at 6.4% in British Columbia.
Participation fell to a decades-low level outside the pandemic
The labour force participation rate fell 0.2 percentage points to 64.8%. Statistics Canada said that was the lowest level since December 1997, excluding 2020 during the COVID-19 pandemic.
The agency attributed much of the year-over-year decline in participation to population aging. People aged 65 and older accounted for 23.2% of the working-age population in the September Labour Force Survey, up from 20.5% in September 2019 and 14.8% at the turn of the millennium.
The participation drop also affects how the unemployment rate reads. In September, fewer people were working, and a smaller share of the population was either working or looking for work.
The report lands ahead of the next Bank of Canada decision
The September jobs report arrives before the Bank of Canada’s next scheduled interest rate announcement and Monetary Policy Report on October 28. The central bank’s policy interest rate was 2.25% after its September 2 announcement.
Statistics Canada’s next Labour Force Survey release is scheduled for November 6, covering labour market conditions during the week of October 11 to 17.
A survey snapshot, not the final word
The Labour Force Survey reflects conditions during the week of September 13 to 19 and is based on a household survey sample of about 65,000 households, representing more than 100,000 respondents each month. Canada-level LFS estimates do not include the territories.
Statistics Canada says monthly estimates can show more sampling variability than longer-term trends. That makes the two-month decline worth tracking, but not enough on its own to define the full direction of the labour market. Payroll employment, job vacancy and employment insurance data will add employer-side and claims-based evidence in later releases.
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