Canada Jobless Rate Drops to 16-Month Low

The unemployment rate in Canada fell to 6.5% in January 2026 from 6.8% in the previous month, undershooting market expectations of 6.8% and marking the lowest level in 16 months, as fewer people searched for work. The decline marked a partial reversal of the prior month’s increase and reflected a 94,000 drop in the number of unemployed to around 1.5 million. The labour force contracted by roughly 94,000, pushing the participation rate down to 65.0% from 65.4%. Net employment fell by 25,000 to 21.12 million, interrupting the recent run of gains. Losses were driven by a 70,000 decline in part-time employment, partly offset by a 45,000 increase in full-time work.

The unemployment rate in Canada rose to 6.8% in December 2025 from 6.5% in the previous month and above market expectations of 6.6%, as more people entered the job market in search of work. The uptick partially reversed a cumulative 0.6-percentage-point decline recorded over the prior two months. The number of unemployed rose by 73,000 to 1.6 million, while the labor force increased by 81,000, pushing the participation rate up to 65.4%. Net employment rose by 8,200 to 21.14 million, marking a fourth consecutive month of improvement. Gains were driven by a 50,200 increase in full-time employment, offset by a 42,000 decline in part-time work.

The unemployment rate in Canada fell to 6.5% in November of 2025 from 6.9% in the previous month, the lowest in 16 months, and contrasting sharply with expectations that it would rise to 7%. The result marked a reversal in the trend of a rising jobless rate through most of the year, as the unemployed population fell by 80 thousand from the previous month to 1.5 million. This was sharper than the 26 thousand reduction in the labor force, bringing the labor force participation rate to 65.1%. In the meantime, net employment jumped by 53.6 thousand to 21.14 million, a third consecutive month of marked improvement. The increase was owed to a 63 thousand surge in part-time employment, with nearly 18% of those reporting to do so involuntarily, a broadly steady ration throughout the last year.