Canada’s labour market shed 4,700 jobs in October, pushing the national unemployment rate to 6.7% from 6.5%, a third consecutive month of deterioration that is now complicating the Bank of Canada’s (BoC) path to a December rate hike.
Statistics Canada released the figures on November 6, with the result significantly undershooting analyst expectations of a 13,600-job gain.
The data arrived less than two weeks after the BoC raised its overnight rate by 25 basis points to 2.50% on October 28, its first increase since July 2023.
Market pricing for a follow-up move in January has already retreated to 77% from 96% the day before the release, according to TD Economics.
A labour market still losing ground
Beneath the headline figure, the composition of job losses told a more troubling story.
Full-time employment fell by 18,100 positions while private-sector employment declined by 52,500, a sharp contrast to public-sector gains of 49,600.
The services sector shed 25,300 jobs, with wholesale and retail trade accounting for the bulk of the damage at 29,000 losses.
Construction added 16,000 jobs and educational services contributed 15,000 on the goods-producing side, according to Statistics Canada.
The result builds on the strain that economists flagged after Canada’s September jobs shock and what it meant for rates, when the economy shed 68,300 positions, its worst month of 2026.
Andrew Hencic, Director & Senior Economist at TD Economics in Toronto, characterised the report as a continuation of a worsening trend.
“We’re now at three months and counting for downbeat labour market reports,” he wrote.
“Ongoing labour force growth means there is growing slack in the labour market. Reinforcing the notion is the ongoing weakness in average hourly earnings — a signal that labour demand is not yet outstripping supply.”
Average hourly wages rose 2.2% year-over-year in October, easing from 2.3% in September.
The job-finding rate sat at 18.9%, well below its 2017–2019 average of 24.6%, according to TD Economics.
Hencic noted the central question now is whether businesses can pass on higher costs in an environment of weak wage growth.
Not all readings pointed uniformly downward. Claire Fan, Senior Economist at RBC Economics in Toronto, noted that prime-age unemployment held steady at 5.6% in October, with weakness concentrated elsewhere.
“Weakness was concentrated in the 15 to 24 year cohort, where the unemployment rate rose sharply to 13.7%, driven by both lower employment and rising labour force participation,” Fan wrote in a research note released following the data.
She also pushed back on concerns that US tariffs were accelerating broad job losses.
“New U.S. tariffs implemented since August 22 have not, and are not expected to lead to widespread layoffs in Canada,” Fan wrote.
“They are severe but of a narrow scope.”
Her outlook was cautiously constructive: “Our forecast expects the unemployment rate in Canada to keep edging lower, to below 6% in the second half of 2027.”
What it means for brokers ahead of December 9
The October rate hike has already deepened broker concerns over Canada’s struggling housing market.
For brokers navigating clients through Canada’s mounting 2026 mortgage renewal pressures, the December 9 decision carries immediate practical consequences.
Jessica Rickerby, president of the Canadian Mortgage Brokers Association of Ontario (CMBA Ontario), said the data reinforces the view that the affordability crisis demands urgent attention. “While inflation is a key concern of Ontarians, so is housing affordability,” Rickerby said. “The difference is that affordability is a pressing issue right now, whereas inflation is — at present — a hypothetical.”
Source CMP
By Liezel Once
