MediumIV Macro Policy & Sovereign Debt6 November 2026, Friday · 16:30 TRT (UTC+3)
Canada sheds jobs for a third straight month as private hiring retreats
Canadian employment fell by 4,700 in October against expectations of a 13,600 gain. Unemployment rose from 6.5% to 6.7%. The private sector lost 53,000 jobs while the public sector added 50,000, and wage growth slowed to 2.2% year on year.
Statistics Canada data released on 6 November show the employment rate down 0.1 points at 60.5%. Wholesale and retail trade lost 29,000 jobs and Alberta 24,000, pushing the province's unemployment rate up 0.9 points to 7.3%. Youth unemployment rose 0.7 points to 13.7%.
According to investingLive, full-time employment fell by 18,100 and part-time rose by 13,400, while the 53,000 drop in the private sector was the first decline since February. BNN Bloomberg says a combined 110,000 jobs were lost in August and September; investingLive shows September revised to a loss of 68,000.
The Bank of Canada raised rates by 25 basis points to 2.5% on 28 October, its first hike since July 2023. According to LSEG data cited by BNN Bloomberg, markets on the afternoon of 6 November priced only a 35% chance of a second hike on 9 December. When US payrolls rose by 165,000 the same day, the US dollar climbed to its highest against the Canadian dollar since 20 October, according to investingLive.
According to BNN Bloomberg, Andrew Grantham of CIBC said the weakness in the 6 November data had spread beyond tariff-exposed sectors. Wage growth easing from 2.3% to 2.2% undercuts the bank's concern that headline inflation near 3% is turning into second-round effects.
Talay assessment
Bottom line
The Bank of Canada raised rates to 2.5% to counter the energy shock, yet the labour market has now contracted for a third month. The 53,000 private-sector loss and wage growth slowing to 2.2% weaken the case for a second hike. The most likely path is for the bank to hold on 9 December, widening the rate gap with the Fed.
Likely effects
- Canadian monetary policyUncertainWeeks
The 35% probability markets assign to a December hike suggests the bank may stop its tightening cycle after a single move.
- Canadian dollarNegativeWeeks
If markets price a hike in the US and a hold in Canada, the rate gap widens and the Canadian dollar stays at its weakest since 20 October.
- HouseholdsNegative1–6 months
Youth unemployment at 13.7% and Alberta's 7.3% rate show demand cooling even in the oil province despite energy prices.
Possibilities, ranked
- 1The bank holds in December60%
Weak hiring and 2.2% wage growth keep the bank at 2.5% on 9 December.
Watch: The Bank of Canada decision on 9 December
- 2Inflation forces a second move30%
Headline inflation approaches 3.5% towards year-end and the bank hikes despite weak employment.
Watch: October CPI, due in mid-November
- 3A trade deal revives hiring10%
A tariff deal with the United States halts losses in wholesale and retail, and the November data recover.
Watch: The November labour force survey, due in early December
Probabilities are calibrated judgement based on the sources, not measurement, and are revised as new information arrives. Not investment advice.
Market reaction
Indicators affected
- Employment change▼ −4,700
- Unemployment rate▼ 6.7%
- Private-sector employment▼ −53k
- December BoC hike odds▲ 35%