Employment change
Actual: -68,000 (-0.3%)
Previous: -42,000 (-0.2%)
Full-time: -35,000 / Part-time: -33,000
Unemployment rate
Actual: 6.5%
Previous: 6.4%
Recent peak: 6.9% in April
Employment rate
Actual: 60.6%
Change: -0.2pt, second consecutive monthly decline
Participation rate
Actual: 64.8%
Change: -0.2pt
Lowest since December 1997 (excluding 2020)
Average hourly wages (Y/Y)
Actual: 2.3% (+$0.86 to $37.64)
Previous: 2.0%
The real signal, two monthly declines erase part of the April to July rebound
Employment had risen by 181,000 between April and July, the last two months cancel roughly 110,000 of that gain
Year over year, employment is still up 95,000 (+0.5%), and the employment rate is unchanged
The unemployment rate rises only 0.1pt because participation falls at the same time
Layoffs are not accelerating, hiring is stalling
Layoff rate: 0.7%, similar to 2025 (0.6%) and the 2017-2019 average (0.6%)
Job-finding rate: 30.6%, versus 32.8% a year earlier and 36.5% on average in 2017-2019
The pattern resembles the US NFP already analyzed in this series: few job losses, but little hiring
Participation, the aging effect
People aged 65 and older make up 23.2% of the working-age population, versus 20.5% in September 2019
Holding the September 2019 age mix constant, participation would be nearly flat year over year (-0.1pt) and 0.2pt above 2019
The participation decline is therefore mostly structural, which limits the negative read of unemployment at 6.5%
Breakdown of the decline
Youth aged 15-24: -48,000 (-1.8%), second straight decline, cumulative -67,000 over two months, unemployment rate stable at 13.0%
Women aged 25-54: -28,000 (-0.4%), unemployment up 0.3pt to 5.3%
Men aged 25-54: employment stable, unemployment down 0.2pt to 5.8%
Aged 55 and older: unemployment up 0.2pt to 5.3%
Industries and public sector
Educational services: -35,000 (-2.2%), -67,000 (-4.2%) year over year
Health care and social assistance: -23,000 (-0.8%), first monthly decline since December 2022
Manufacturing: -13,000 (-0.7%) after +22,000 in August
Other services: +17,000 (+2.1%)
Public sector employees: -70,000 (-1.5%), fourth consecutive monthly decline and -119,000 (-2.6%) year over year
Private sector employees: little changed, +163,000 (+1.2%) year over year
Provinces
Quebec: -49,000 (-1.1%), unemployment up 0.4pt to 6.0%, cumulative -130,000 since January
British Columbia: -20,000 (-0.7%), first decline since March
Ontario: -20,000 (-0.2%), unemployment stable at 7.0%
Alberta: +23,000 (+0.9%), unemployment down 0.4pt to 6.4%
Wages, an acceleration that remains modest
Growth moves from 2.0% to 2.3%
With Canadian CPI at 3.0% and core ex-gasoline at 2.4% (already documented in this series), real wages remain negative year over year
Implications
CAD: short-term bearish bias, two straight monthly employment declines reduce the BoC’s room to tighten, while the market still prices 110bp of cumulative tightening by end of 2027
BoC: hold odds at the next meeting (65% before this report) should strengthen, and the 2027 cumulative pricing is exposed to another drop
USD/CAD: likely supported after a weak NFP but claims at 197,000, the labor momentum gap is less unfavorable to the US dollar than it looked
Oil: Brent near $100 supports the CAD, which can cushion the exchange rate reaction
Point of caution
The decline is concentrated in the public sector (education, health) and youth, while the private sector is stable: this should not be read as a labor market collapse
The LFS is volatile (68% confidence threshold), a rebound next month is possible, especially as employment is still up over 12 months
Quebec has lost 130,000 jobs since January, a regional imbalance to watch, against the backdrop of the US tariff tensions flagged in the ISM surveys
Oil falling on a US-Iran breakthrough would weaken the CAD’s support just as labor data deteriorates