Canada unemployment rises to 6.5% after job losses

Canada's unemployment rate rose to 6.5 percent in September as the country lost 68,000 jobs, official data showed Friday.

The increase followed a 42,000-job decline in August, when the unemployment rate was 6.4 percent. Employment fell among young people aged 15 to 24 and women, with declines concentrated in education, health care and manufacturing.

The figures came after a trade dispute with the United States escalated. New US tariffs imposed by President Donald Trump took effect August 22, and Canada retaliated with matching tariffs calculated to offset the US duties dollar for dollar. There are no current plans to resume trade talks between the two countries.

TD Bank economist Andrew Hencic said “trade frictions and higher rates” were weighing on activity. CIBC economist Andrew Grantham said the weak jobs data was likely more a reflection of data volatility than the impact of new US tariffs.

Grantham expects the Bank of Canada to keep its key interest rate unchanged at 2.25 percent at its next policy announcement on October 28.