Canada: Gradual improvement expected – RBC

Royal Bank of Canada (RBC) economist Claire Fan notes Canada lost 68,000 jobs in September, mainly in public sectors, reversing much of summer gains and leaving year-to-date employment at -41,000. She highlights volatility in monthly data and stresses the unemployment rate remains below last year. Fan expects earlier labour market progress to hold and the unemployment rate to edge lower through 2026. "Canada's labour market lost 68,000 jobs in September, driven by losses in public sectors (education and health care), piling onto the 42,000-job loss in the prior month." "The monthly employment counts are notoriously volatile, and there are reasons not to read too much into the softer reading too quickly." "Looking ahead, we continue to point to important leading indicators such as job openings from Indeed.com as indications that hiring demand has not retreated to a problematic extent since new U.S. tariffs (that cover a small scope of Canadian exports) were imposed." "We expect progress made in Canada's labour market earlier will be largely sustained, and the unemployment rate to broadly edge lower through the end of 2026."