Canada Unemployment Hits Six-Month High as Private Sector Sheds Jobs

Canada's unemployment rate rose to 6.7 per cent in October, reaching a six-month high and the highest level since April. According to data from Statistics Canada, the economy lost a net total of 4,700 jobs, missing economist expectations of a 13,600 job gain. This follows a cumulative loss of 110,000 jobs across August and September.

The decline was driven by the private sector, which shed approximately 53,000 positions—its first drop since February. The wholesale and retail trade industry led these losses, alongside declines in transportation and warehousing. These losses were partially offset by a 50,000-job increase in the public sector and growth in construction, which added 16,000 jobs. Regional impacts varied, with Alberta losing 24,000 positions and Quebec reporting a year-over-year loss of 106,000 jobs, while British Columbia added 12,000 jobs.

Labor market weakness is attributed to corporate cost-cutting and worsening trade tensions with the United States, specifically tariffs imposed by President Donald Trump. Youth unemployment for those aged 15 to 24 jumped to 13.7 per cent, and long-term unemployment rose to 23.7 per cent of the jobless population. Statistics Canada noted that over 25 per cent of the employable population struggled to meet basic financial needs for housing, food, and transportation.

These figures follow a recent quarter-point interest rate hike by the Bank of Canada to 2.5 per cent to combat inflation. In response to the weak labor data, the Canadian dollar weakened, and money markets shifted expectations for the next interest rate hike from January to March.