Canada's Unemployment Rate Climbs to 6.7%, a Six-Month High, as the Economy Sheds 4,700 Jobs

Photo: Toronto skyline at dusk, seen from the Toronto Islands — Jchmrt, via Wikimedia Commons (CC BY-SA 4.0). File photo, not taken today.

Finance Minister François-Philippe Champagne stood in the House of Commons on Thursday and pointed to a 6.5 per cent unemployment rate as proof his budget was working. The number was out of date before the ink on the speech was dry.

Statistics Canada released its October Labour Force Survey on Friday morning, and the picture it painted was colder than the one in the budget. The unemployment rate rose to 6.7 per cent — up 0.2 percentage points in a single month, the second monthly increase in a row, and the highest it has been in six months. The last time it sat higher was April, at 6.9 per cent.

The economy shed a net 4,700 jobs in October. That sounds small until you put it next to what came before: 68,300 jobs lost in September, 42,000 more in August. Add it up and Canada has now lost about 46,000 jobs in 2026. On an average month this year, the economy has shed 4,590 jobs — a sharp turn from 2025, when it added an average of 17,606 a month, and from 2024, when the average gain was 33,675.

Economists polled by Reuters had expected the opposite: a gain of 13,600 jobs and the unemployment rate holding at 6.5 per cent. They got neither.

The private sector carried the losses

Look under the headline and the split is stark. Private-sector employers cut 52,500 jobs in October, their first decline since February. Full-time work shrank by 18,100 positions. The public sector moved the other way, adding 50,000 jobs — which is why the net figure looks almost flat even while the private economy contracted.

Wholesale and retail trade took the hardest single hit, shedding 29,000 jobs in the month. The sector has now lost 113,000 jobs over the past year, a drop of 3.7 per cent, as Canadian shoppers pull back and stores trim staff.

The employment rate — the share of Canadians aged 15 and older who actually have a job — slipped 0.1 points to 60.5 per cent, its third consecutive monthly decline. The participation rate held steady at 64.8 per cent, which means the rising unemployment rate is not a statistical quirk of people leaving the workforce. It rose because 33,000 more Canadians started looking for work in October and did not find it.

Young workers are feeling it worst

For Canadians aged 15 to 24, the unemployment rate jumped 0.7 percentage points to 13.7 per cent — more than double the national rate, and the group that usually feels a hiring freeze first.

Workers aged 55 and older saw their rate rise 0.2 points to 5.5 per cent. For core-age workers, 25 to 54, the rate was unchanged: 5.8 per cent for men, 5.3 per cent for women.

Then there is the number that worries labour economists most. Of the roughly 1.5 million Canadians unemployed in October, 23.7 per cent had been searching for work for 27 weeks or more, up from 21.5 per cent a year ago. Long-term unemployment is the kind that scars — skills rust, savings drain, and every extra month out of work makes the next job harder to land.

Why hiring has stalled

Reuters put it plainly: the labour market has failed to post any job gains on average this year as trade tensions between the United States and Canada worsened and businesses hunkered down to save costs. RBC Economics said conditions loosened again in October and slack persists, though it expects the unemployment rate to fall below 6 per cent in the second half of 2027.

One pressure valve is already easing. Growth in average hourly wages for permanent employees — the measure the Bank of Canada watches most closely for inflation pressure — slowed to 2.0 per cent year-on-year in October, down from 2.3 per cent in September. The policy rate sits at 2.5 per cent after the 25-basis-point increase on October 28.

Measured on the U.S. Labor Department's methodology, Canada's rate actually slipped 0.1 points to 5.5 per cent — the two countries count joblessness differently, and the Canadian figure still sits 0.2 points below where it was a year ago.

The political reaction came fast. Conservative MP Garnett Genuis responded to the numbers within hours of their release, pressing the government on a labour market that has now gone three straight months without a gain.

For the Carney government, the timing stings. Budget 2026 was sold as a plan built on a resilient economy. Less than 24 hours after it was tabled, the freshest data available said the economy is shedding jobs, the jobless rate is climbing, and young Canadians are finding the door shut. The question now is whether the next few months prove the October report was a blip — or the start of something worse.

Sources

• Reuters — "Canada's unemployment rate edges up to six-month high in October"
• Canadian HR Reporter — "Canada's unemployment rate climbs to 6.7% as hiring stalls in October" (Statistics Canada data)
• The Wall Street Journal via TradingView — "Canada Unemployment Rate Climbs to Six-Month High of 6.7%"
• Retail Insider — "Canadian employment holds steady in October as wholesale and retail trade shed 29,000 jobs: Statistics Canada"
• Forex Factory — "Canada Labour Force Survey, October 2026" (Statistics Canada release)