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Outbyte Driver Updater FREEScan for outdated or missing drivers - takes under a minuteDriver Scan →Outbyte PC Repair FREERepair Windows errors before they cause bigger problemsFix Now →Canada lost 68,000 jobs in September 2026, extending August’s decline and making an October Bank of Canada rate hike less likely in market expectations. But the Bank had not made its October decision: the jobs report is one input, and policymakers had also warned that inflation risks were tilted upward. The next rate announcement was scheduled for October 28, 2026.
What happened in Canada’s September jobs report?
Employment fell by 68,000, or 0.3%, to 21,105,000 in September, following a 42,000 decline in August. The unemployment rate rose 0.1 percentage points to 6.5%. These are seasonally adjusted monthly estimates from Statistics Canada’s Labour Force Survey, which covers people aged 15 and older in Canada subject to specified population exclusions; they are survey estimates, not administrative payroll counts. Statistics Canada’s September 2026 release has the full definitions and tables.
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The September decline was much weaker than the 9,200-job increase economists had expected in a Reuters poll before the release. Reuters also reported that money markets priced in no October hike after the report. That pricing is a snapshot of expectations, not a commitment by the Bank of Canada. Reuters’ report covered both the poll and the market reaction.
Employment fell more than unemployment rose
A 68,000 employment decline does not mean 68,000 more people became unemployed. The unemployment rate is the share of the labour force that is without work and seeking work. Statistics Canada reported that the participation rate also fell, by 0.2 percentage points to 64.8%, while the employment rate dropped 0.2 points to 60.6%. At 64.8%, participation was the lowest since December 1997, excluding the COVID-19 pandemic period. The shrinking share of people participating helps explain why the unemployment rate moved only slightly despite the employment loss. Statistics Canada’s labour-force detail provides these rates.
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The losses were concentrated, not evenly distributed
Youth aged 15–24 accounted for a decline of 48,000 jobs, down 1.8%, and women aged 25–54 lost 28,000 jobs, down 0.4%. By industry, educational services fell by 35,000, health care and social assistance by 23,000, and manufacturing by 13,000. These figures show where the monthly decline was concentrated; they do not establish that every sector or group weakened equally. Statistics Canada’s breakdown by age, gender and industry lists the changes.
Other indicators point to weaker hiring, but not a surge in layoffs
The layoff rate was 0.7%, close to its year-earlier level of 0.6% and the 2017–2019 average of 0.6%. The job-finding rate, at 30.6%, was below its 2017–2019 average of 36.5%. Together, those measures suggest that the weakness was more evident in people finding work than in a layoff rate far above its pre-pandemic comparison. Statistics Canada’s flows and rates data reports these measures.
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There is also a broader time-frame counterpoint: despite losses in August and September, employment remained up 95,000, or 0.5%, year over year. Average hourly wages among employees rose 2.3% year over year, or $0.86, to $37.64 in September. Those annual comparisons temper, but do not erase, the latest two months’ deterioration.
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Why the report put an October rate hike in doubt
Two consecutive monthly employment declines, a participation rate at a decades-low level outside the pandemic period, and a below-average job-finding rate make the labour-market case for raising rates less persuasive than it was before September’s data. The much weaker-than-expected headline also helps explain why Reuters reported that markets shifted to pricing no October increase.
That is a change in the balance of evidence and expectations—not a signal from the Bank that it would hold rates. A weaker labour market can reduce pressure on wages and demand, but the employment report alone cannot establish the direction of inflation or settle the Bank’s policy decision.
Why the Bank could still raise rates
On September 2, 2026, the Bank of Canada held its overnight-rate target at 2.25%. Its statement said the economy and inflation were evolving broadly as forecast, while warning that upside risks to inflation had increased and new US tariffs made the growth outlook more uncertain. The Bank therefore faced competing considerations: labour-market weakness argues against tightening, while heightened inflation risks can argue for it. The Bank’s September decision statement describes that balance.
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The Bank said: “Governing Council will assess the sustainability of the economic rebound and the outlook for inflation, and is prepared to adjust monetary policy as needed.” That leaves its next move dependent on the incoming evidence, rather than committing it to either a hike or a hold.
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Repair Windows errors before they cause bigger problemsFix Now →Scan for outdated or missing drivers - takes under a minuteDriver Scan →Is a Bank of Canada rate hike coming in October?
It was not known as of October 11, 2026. The Bank’s next rate announcement, accompanied by a Monetary Policy Report, was scheduled for October 28, 2026, at 09:45 ET. September’s jobs report made a hike less supported by labour-market evidence and market pricing moved away from one, but neither outcome determines the Bank’s decision. The report for October reference-week conditions was scheduled for release on November 6, so it was not due before the October announcement. The Bank’s announcement schedule lists the dates.
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