Statistics Canada said Friday the economy lost 68,000 positions in September, coming off a loss of 42,000 roles in August. Economists had expected a gain of 9,200 jobs in the month.

StatCan said job losses were nearly evenly split between full- and part-time work and were concentrated in the public sector.

The unemployment rate edged up a tenth of a point to 6.5 per cent last month, back to where it stood at the start of the year in January.

September now marks the steepest single month of job losses since February.

Before recent weakness, employers had collectively added 181,000 positions from April through July. Employment was up 95,000 positions compared with last September.

The educational services sector led the declines with a loss of 35,000 positions last month, followed by the health care and manufacturing industries. September, meanwhile, recorded a gain of 17,000 jobs from a segment that includes repair, maintenance and other household and personal services.

Provincially, Quebec stood out with a loss of 49,000 jobs last month, while Ontario and British Columbia both shed 20,000 positions. Alberta added 23,000 roles.

The September jobs report is one of the first major economic releases since the trade dispute between Canada and the United States ratcheted back up.

Despite job losses in manufacturing, most economists weighing in Friday were not ascribing too much tariff weight to the data.

"Most September losses came from non-trade-facing sectors and from educational services for Quebec in particular, so it would be premature to blame tariffs for the weakness," said Daniel Hyun, senior economist at KPMG Canada, in a note.

Signs of stability in the private sector — despite four straight months of declines in public sector employment — were also reassuring to economists.

Youth aged 15 to 24 bore the brunt of the losses in September with 48,000 fewer jobs, though a shrinking labour pool for young workers meant the unemployment rate for the cohort was little changed at 13 per cent.

Women aged 25 to 54 also lost 28,000 positions in September.

Average hourly wages rose 2.3 per cent on an annual basis last month, StatCan said, up from two per cent in August.

The September jobs figures mark the Bank of Canada’s last look at the labour market before its next interest rate decision set for Oct. 28.

The central bank's policy rate has been at 2.25 per cent for nearly a year.

TD Bank senior economist Andrew Hencic said in a note to clients that two months of weak labour market figures between Bank of Canada decisions will pour cold water on calls for interest rate hikes in the near term.

While the central bank has been guarding against both tariff-induced economic weakness and price hikes from the war in the Middle East, Hencic said monetary policymakers have signalled lately they're more concerned about bubbling inflationary pressures.

TD expects the Bank of Canada to remain on hold this month as new tariffs take some steam out of the economy and keep inflation in check.

Hyun said the soft labour report casts a bit of doubt on KPMG Canada's call for a quarter-point hike in December. But for now the firm's economists still expect the central bank will raise its policy rate to 2.5 per cent to end the year to push back against inflation risks.

This report by The Canadian Press was first published Oct. 9, 2026.