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Canada Job Losses Rise, Unemployment Rate Drops in January

Okay, hear's a summary of the canadian employment report for January, based on the provided text, formatted for clarity and including the date: Canadian Employment Report - January 2026 Key Highlights: * Job Losses: Canada's economy lost 25,000…

Canada Job Losses Rise, Unemployment Rate Drops in January

Okay, hear’s a summary of the canadian employment report for January, based on the provided text, formatted for clarity and including the date:

Canadian Employment Report – January 2026

Key Highlights:

* Job Losses: Canada’s economy lost 25,000 jobs in January, primarily in part-time work (down 1.8%).
* Unemployment Rate: Despite the job losses, the unemployment rate decreased to 6.5%, the lowest since September 2024. This is attributed to fewer people actively searching for work.
* Labor Force Participation: The labour force participation rate declined to 65%. There was also a year-over-year increase in the number of people neither employed nor seeking work.
* Wage growth: Average hourly wages increased by 3.3% ($1.18) year-over-year, reaching $37.17 per hour.

Sectoral Trends:

* Meaningful Losses: Manufacturing experienced the largest job losses, continuing a trend linked to U.S. tariffs. Educational services and public governance also saw declines.
* Gains: Employment increased in facts, culture & recreation, business support services, agriculture, and utilities.
* Provincial Variations: Ontario saw a significant job loss of 67,000 (concentrated in manufacturing). alberta (+20,000), Saskatchewan (+6,100), and Newfoundland & Labrador (+3,800) experienced job gains.

Economic context & Analysis:

* Mixed Signals: Economists describe the report as a “mixed bag,” with declining employment alongside a falling unemployment rate.
* Underlying Factors: The Canadian economy is adjusting to:
* U.S.Tariffs impacting manufacturing.
* A slowdown in population growth.
* A growing 65+ population.
* bank of Canada Implications: While the cooling job market might normally suggest a need for lower interest rates, the Bank of Canada is unlikely to change its current policy based on this report. Governor Macklem has indicated a high bar for shifting from the current interest rate hold.
* Private vs. Public Sector: Private sector employment fell by 52,000, partially offsetting gains from the previous quarter, while public sector employment remained relatively stable.

Date of Report: February 2026 (based on the prompt’s provided date)

Source: Statistics canada & analysis from BMO and CIBC Capital Markets.

About the author: Marcus Liu - Business Editor

MBA and ex‑B bureau chief specializing in global finance and fintech. Marcus speaks Mandarin, Japanese, and English, and has interviewed CEOs from the Fortune 50 to Y‑Combinator unicorns. Marcus Liu delivers sharp analysis on markets, startups, and corporate strategy for investors and entrepreneurs alike.