Canada’s unemployment rate hits six-month high as economy sheds jobs in October

Canada’s labour market weakened in October as employment declined and the unemployment rate climbed to its highest level in six months, with private-sector and full-time positions bearing the brunt of job losses amid persistent economic uncertainty and trade tensions with the United States.

The unemployment rate rose to 6.7% in October from 6.5% in September, Statistics Canada said on Friday. The rate was above economists’ expectations of 6.5% and reached its highest level since April, when unemployment stood at 6.9%.

"While the Canadian Labour Force Survey is notoriously volatile, three monthly declines in a row is a trend that is hard to ignore," CIBC economists said. "While there’s one more LFS report due for release before the Bank’s December meeting, the recent trend in the labour market suggests that slack is opening up again in the economy and supports a hold at that time," they added.

The economy lost a net of 4,700 jobs in the month. Private-sector and full-time employment recorded declines, pointing to weakness in the more established segments of the labour market. The latest figures also brought Canada’s cumulative employment losses this year to approximately 46,000 positions.

The deterioration comes as businesses contend with heightened uncertainty surrounding trade relations with the United States, prompting companies to exercise caution, contain costs and remain reluctant to expand their workforces.

The October report adds to concerns about labour-market momentum and will be closely monitored by the Bank of Canada as policymakers assess the balance between economic weakness and persistent inflation risks. A softer employment environment could strengthen the case for further monetary easing, although the central bank will also consider inflation, wage growth and broader economic conditions.

Canada’s employment performance has been particularly weak compared with previous years. The economy has shed an average of 4,590 jobs per month so far in 2026, contrasting with average monthly employment gains of 17,606 in 2025 and 33,675 in 2024.

The weakness is also translating into financial pressure for households. More than one in four people aged 15 and older reported difficulty meeting essential expenses, including transportation, housing, food and clothing, over the previous four weeks, Statistics Canada said.