Canada Loses Jobs for Third Straight Month as Unemployment Hits 6.7%

Canada shed 4,700 jobs in October, a third consecutive month of losses, pushing the unemployment rate up to 6.7 per cent. The drop follows the breakdown of trade talks with the U.S. in August — and the timing is not a coincidence, according to RSM Canada's analysis in The Real Economy Canada.

The most concerning number sits below the headline: private sector employment fell by 53,000, the first decline since February. Businesses paused hiring and started layoffs in response to high oil prices and trade-policy uncertainty. That's not a macro abstraction. That's 53,000 paycheques gone in one month.

What does the data actually say?

Wage growth reached 2.2 per cent in October, well below headline inflation at 3.1 per cent but roughly in line with core inflation (inflation excluding volatile food and energy prices). For anyone negotiating a raise, that gap means real earnings are flat to negative. Weak wage growth is classic evidence of a cooling job market — employers don't need to bid for talent when applicants are queuing.

The pain is not evenly distributed. Most of the unemployment increase hit two groups:

• Youth unemployment rose 0.7 percentage points to 13.7 per cent
• Unemployment for people aged 55 and older rose 0.2 percentage points to 5.5 per cent

Core-age workers (25 to 54) held steady: men unchanged at 5.8 per cent, women unchanged at 5.3 per cent. If you're mid-career, your market position looks comparatively stable. If you're early-career or nearing retirement, you're absorbing the shock.

Regionally, Alberta stands out. Its unemployment rate jumped 0.9 percentage points to 7.3 per cent. That's little changed from a year ago, but it's unusual for Alberta during a period of high oil prices. RSM suggests it may be a temporary blip tied to October's political uncertainty, in which case job numbers should recover in November and beyond.

Why is hiring frozen?

The past three months of job losses track directly with the collapse of trade talks with the U.S. in August. The latest tariffs touch only select industries, but the tension itself did damage. Heightened uncertainty caused businesses to freeze hiring and begin layoffs across the board.

The U.S. midterm results may only moderately affect the Canadian economy, since most tariffs on Canadian exports were imposed by executive orders. The main effect on Canada could be reduced uncertainty and volatility — plus potentially lower oil prices. Oil in fact saw its biggest drop since 2020 following the midterm results, easing what the Bank of Canada has named its biggest threat: prolonged high oil prices.

What about interest rates?

The weakening job market strengthens the case for the Bank of Canada to hold its key interest rate in December before raising it again in January. Markets have moved accordingly: the odds of a December rate hike dropped to 33 per cent. The central bank has explicitly emphasized price stability, with its 2 per cent inflation target as the number one priority.

For workers, a rate hold in December means borrowing costs stay where they are a little longer. It also signals the central bank sees the same softness in hiring that you're seeing in job postings.

What comes next?

RSM Canada expects hiring freezes and layoffs to continue for a few more months, especially in trade, manufacturing and technology. If you work in those sectors, the practical read is straightforward: the market has tilted toward employers, wage leverage has thinned, and job searches in exposed industries will likely run longer heading into year-end.