6.5%: Canada’s Unemployment Rate Expected to Hold as Hiring Rebounds

6.5% is the forecast for Canada's Unemployment Rate in October, unchanged from the previous month.
Following September's loss of 68.3K jobs, Canada's economy is forecast to add 13.6K positions.
Expectations for additional Bank of Canada interest rate increases could shift with the employment report.

Nearly 110K jobs were lost across August and September. Investors now await signs that employment conditions are stabilising as Statistics Canada prepares to publish its October Labour Force Survey on Friday at 13:30 GMT. Markets forecast a modest employment rebound after September's steep fall. The Unemployment Rate will be another focus, with the latest data potentially influencing the Canadian Dollar (CAD). Uncertainty over United States (US) tariffs continues to cloud the Canadian labour market, weighing on recruitment prospects in trade-sensitive industries.

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Public-sector roles, notably in education and healthcare, accounted for most of September's employment losses, according to Royal Bank of Canada (RBC), rather than industries directly exposed to US tariffs. The bank also points to initial signs of stronger hiring demand in October. This suggests trade restrictions may have interrupted the labour market's recovery without causing a wider deterioration.

Following the Bank of Canada's (BoC) benchmark interest rate increase on 28 October, the employment data carry added significance. The move was the central bank's first increase in more than three years. Further monetary tightening remains an option, although subsequent decisions will be guided by incoming growth and inflation figures.

A jobs report that exceeds forecasts could therefore bolster expectations for additional BoC rate increases, especially alongside robust wage growth. A further weak result, by contrast, could deepen doubts about Canada's capacity to weather continuing trade tensions and prompt policymakers to proceed more cautiously.

6.5% Unemployment Rate Forecast as Canada Awaits Jobs Data

Analysts' consensus forecast puts Canada's October Unemployment Rate at an unchanged 6.5%. Employment is projected to rise by around 13.6K, recovering part of September's sizeable 68.3K loss.

A 15K employment gain and a small fall in the Unemployment Rate to 6.4% form RBC's slightly stronger forecast. In the bank's view, US tariff effects remain focused on directly exposed sectors. It notes that more than 80% of Canadian exports to the US still qualify for duty-free access under the United States-Mexico-Canada Agreement (USMCA).

To judge whether labour market conditions in Canada are stabilising, investors will look beyond the headline numbers. Manufacturing employment, full-time jobs, wage growth and the participation rate will receive particular scrutiny.

13:30 GMT Friday: Canada's October Unemployment Rate and USD/CAD Impact

Friday at 13:30 GMT is the scheduled release time for Statistics Canada's October employment report. If the figures beat expectations, the Canadian Dollar could gain support. Lower unemployment and faster wage growth would strengthen that support by reinforcing expectations of further BoC monetary tightening.

A further employment disappointment, however, could curb expectations of additional rate increases and pressure the Loonie. That risk would be particularly relevant if job losses spread beyond industries directly exposed to US trade restrictions.

With the US employment report due at the same time, USD/CAD volatility could intensify. Investors will compare the two labour markets and weigh the implications for monetary policy.

Around 1.4070, USD/CAD retains an upward bias on Friday. A stronger US Dollar (USD) is supporting the pair as markets remain cautious ahead of both countries' employment releases.

Trading above the 100-period and 200-period Simple Moving Averages (SMAs), which converge just below 1.4000, USD/CAD maintains a favourable near-term outlook on the one-hour chart. The pair is testing horizontal pivot resistance at 1.4070. Near 82, the Relative Strength Index (14) is well into overbought territory, signalling strong but increasingly stretched upward momentum as the pair advances.

A decisive move through 1.4070 would bring immediate resistance at 1.4115 into focus. This horizontal barrier could limit further upside if buyers cannot sustain the breakout. Initial downside support lies around the psychological 1.4000 level, ahead of the 200-period SMA near 1.3993. Should a corrective retreat develop, the 100-period SMA around 1.3981 and horizontal support at 1.3930 form a deeper demand zone.

(The technical analysis of this story was written with the help of an AI tool. Know more.)

Economic Data

Net Change in Employment

Published by Statistics Canada, Net Change in Employment tracks changes in the number of people employed in Canada. An increase generally supports consumer spending and signals economic growth. A high reading is consequently viewed as bullish for the Canadian Dollar (CAD), whereas a low reading is considered bearish.

View details.

Upcoming release: Fri 6 Nov 2026 13:30

Release frequency: Every month

Consensus forecast: 13.6K

Prior reading: -68.3K

Data source: Statistics Canada

Employment Change: A Key Driver for CAD Traders

Employment Change carries the greatest weight among Canada’s labour market indicators. These statistics typically have a substantial influence on the Canadian dollar. Employment levels are closely correlated with consumption, which affects inflation and the Bank of Canada’s interest rate decisions, ultimately moving the C$. A reading above consensus is generally bullish for CAD, with currency markets typically responding to the release in a steady and consistent manner.

Employment: Key Questions Answered

Employment Levels and Their Impact on Currencies

As a key measure of economic health, labour market conditions play a major role in currency valuation. High employment, or low unemployment, supports consumer spending and economic growth, strengthening the domestic currency. A particularly tight labour market, where too few workers are available to fill vacancies, can also affect inflation and monetary policy. When demand for workers is high but supply is limited, wages rise.

Wage Growth: A Key Measure of Inflation Pressure

For policymakers, the rate of wage growth is a crucial consideration. Rapid salary increases give households more money to spend, typically pushing up consumer goods prices. Unlike more volatile inflation drivers, such as energy prices, wage growth is regarded as a key source of underlying, persistent inflation because pay rises are unlikely to be reversed. This is why central banks worldwide closely monitor wage data when setting monetary policy.

Employment’s Weight in Central Bank Decisions

Central banks give different weight to labour market conditions according to their objectives. For some, explicit employment-related mandates sit alongside the task of controlling inflation. The US Federal Reserve (Fed), for instance, has a dual mandate to promote maximum employment and stable prices. By contrast, the European Central Bank’s (ECB) sole mandate is to keep inflation under control. Whatever their mandates, policymakers regard labour market conditions as important because they indicate the health of the economy and have a direct relationship with inflation.