Canada jobless rate ticks up to 6.7% as hiring slides for a third month

The raw numbers and where they moved

Statistics Canada reported the jobless rate rose to 6.7% in October as employment slipped by 4,700, the third consecutive monthly drop. Economists polled by Bloomberg were looking for a 15,000 gain and a steady 6.5% unemployment rate instead.

Hiring by the public sector climbed by 49,600, but a 52,500 decline in private employment outweighed it. Construction added 15,600 jobs in the month and is up 47,000 from a year earlier. Educational services increased by 15,000 in October, yet remains 48,300 below its level 12 months ago.

Wholesale and retail trade shed 28,800 positions in October and is down a cumulative 113,100 over the past year, with the yearly pullback centered in Ontario, Quebec and British Columbia. For younger workers, the unemployment rate for 15 to 24 year olds rose 0.7 percentage points to 13.7%.

Longer job hunts are increasingly typical: among those unemployed in October, 23.7% had been seeking employment for at least 27 weeks, up from 21.5% a year earlier. Average hourly pay for permanent full time workers increased 2% from a year earlier, easing from 2.3% and coming in below the 2.1% economist estimate.

Markets, policy and what shifted at the BoC

The softer print reset rate expectations. After the data, traders saw about a one in three chance of a Bank of Canada hike in December, down from roughly 40% a day earlier. Bonds rallied, pulling the 2 year Government of Canada yield down to 3.113% from an intraday high of 3.175%, while the Canadian dollar was down by over 0.5% at 9:50 a.m. in Toronto.

The Bank of Canada raised rates last week, putting more weight on inflation risks despite labor market softness. Governor Tiff Macklem said there is no preset path for policy and decisions will be taken one meeting at a time.

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Policymakers expect price pressures to be amplified by an energy shock tied to conflict in the Middle East, and they see Canadian growth slowing in part due to US tariffs. The bank also refreshed its policy framework on Thursday, dialing back the focus on supporting "maximum sustainable employment."

The broader backdrop and expert reads

In 2026, the labor market has come to a standstill as US tariffs continue to hit parts of the economy. So far this year, employment is down by 45,900, which Statistics Canada says is the largest year to date loss since the Covid 19 pandemic. The share of Canadians in households struggling to cover financial needs rose for the first time since 2022, up to 29.7% in October from 27.7% in October 2025.

"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 of Servus Credit Union, where he is the chief economist.

Benjamin Reitzes of Bank of Montreal, a strategist specializing in Canadian rates and macro, remarked, "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." "This will surely prompt some caution at the Bank of Canada around the timing of further rate hikes."

Prime Minister Mark Carney said Sunday that Canada and the US will restart trade talks in the coming weeks to pursue a "mutually beneficial" outcome.

Why this matters for your portfolio

Weak hiring, longer job searches and softer wages powered a bond rally and a weaker loonie, while the Bank of Canada keeps one eye on inflation and the other on a cooling job market. In plain English: interest rate odds eased, bond prices rose, and currency exposure mattered.

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