Canada Jobless Rate Rises to 6.7%, Employment Falls

Canada’s unemployment rate edged up to 6.7% in October as more people looked for work and employment fell slightly, pointing to ongoing softness in the labor market.

Overall employment fell by 4,700 last month, Statistics Canada reported on Friday. The number of private-sector employees declined by 52,500, marking the first drop since February, but largely offset by a 49,600 increase in public-sector workers. The jobless rate climbed from 6.5% in September.

Employment in wholesale and retail trade fell by 28,800 last month, and has trended downward over the past year, with the industry shedding a cumulative 113,100 jobs. The year-over-year decline was concentrated in Ontario, Quebec and British Columbia.

Economists surveyed by Bloomberg had expected that employment increased by 15,000 in October and the jobless rate held steady at 6.5%. Bonds rallied after the release, sending the two-year government bond yield tumbling to 3.126% as of 8:48 a.m. in Ottawa. Earlier, it had traded as high as 3.175%. The Canadian dollar extended losses to trade down almost 0.6% on the day.

The job market has stalled this year as US tariffs continue to punish some sectors of the economy. Employment has declined by 45,900 so far this year, which continues to be the largest year-to-date loss since the 2009 financial crisis, excluding the first year of the Covid-19 pandemic.

But the labor market weakness didn’t stop the Bank of Canada from raising interest rates last week, as it placed more emphasis on inflation risks.

Governor Tiff Macklem said the central bank doesn’t have a predetermined path for interest rates, and will take future decisions one at a time. Traders in overnight swaps dropped the odds of another rate hike in December to 30% from 40% after the job release.

While the central bank sees inflation risks mounting from the ongoing energy shock of the Middle East conflict, growth in Canada is also expected to slow as US tariffs continue to weigh on the economy. On Thursday, the bank renewed its policy framework, with less emphasis on supporting “maximum sustainable employment.”

“With this in mind, the Bank of Canada is likely to continue to desire to raise rates preemptively to avoid inflation rising above its target, despite no clear signs of broadening inflationary pressures in the recent CPI data,” said Charles St-Arnaud, chief economist at Servus Credit Union.

Prime Minister Mark Carney said on Sunday that Canada and the US are set to resume trade talks to work on a “mutually beneficial” outcome in the weeks ahead.

Long-term joblessness has increased in Canada over the past year, with the share of unemployed Canadians in October who have been looking for work for 27 weeks or more increasing to 23.7%, up from 21.5% a year prior.

“While we’re always reluctant to read too much into any given month of employment data, it’s tough to shrug off three straight months of job losses,” said Benjamin Reitzes, managing director of Canadian rates and macro strategist at the Bank of Montreal. “This will surely prompt some caution at the Bank of Canada around the timing of further rate hikes.”

The job report also found the share of Canadians living in households that are struggling to meet their financial needs increased for the first time since 2022, with 29.7% reporting those challenges compared with 27.7% in October 2025.

The unemployment rate for youth between the ages of 15 and 24 increased the most last month, rising by 0.7 percentage points to 13.7%.

Meanwhile, employment increased in construction by 15,600 and is up by 47,000 from a year ago.

The number of people employed in educational services also increased by 15,000 but is down by 48,300 compared with 12 months earlier.

Average hourly wages of permanent full-time employees were up 2% from a year ago, down from 2.3% and below the 2.1% economist estimate.