Monday Market Minute | Oct 12, 2026

September sheds 68,000 jobs and participation hits a multi-decade low as the loonie weakens and the WCS discount widens

What Moved

Friday's September labour force survey was the second straight negative print, and larger than expected. Statistics Canada reported employment down 68,000, against a consensus of +9,200; unemployment rose to 6.5%, and participation dropped to 64.8% — the lowest since December 1997 outside 2020. Public-sector employment fell 70,000, wages rose 2.3% year-over-year, and 2026 employment is down 41,200 year-to-date. With August's −42,000, the two months have erased more than half of the April–July gains. Markets showed strain earlier in the week. The TSX closed at 35,041.86 on October 7, its lowest close since July, and the loonie weakened to 1.4271 per US dollar on October 9 even with Brent futures at $104.28 on October 8. Western Canadian Select's November discount widened to −$25.20 the same day, the widest since 2023. Canadian corporate bond issuance reached a record $165 billion year-to-date, per the Globe and Mail. On October 11, Iran called the US response to its Hormuz proposal "insufficient."

Why It Matters

The report sharpens the tension the Bank of Canada must weigh on October 28. On one side sit headline inflation near 3% and deliberations noting that energy spillover "could require a monetary policy response." On the other, two months of job losses and falling participation point to an economy cooling after the August break in trade talks. Markets last priced the decision as close to a coin flip — pricing, not guidance — and Friday's data give both sides something to cite.

For private real estate and mortgage lending, the transmission is visible. Toronto's September home price index was 4.7% below a year earlier on sales down 9.0%, and national asking rents fell 4.2% to $2,034 — a 24th straight annual decline and 9.2% below the May 2024 peak. The lowest insured five-year fixed rate stood at 4.34% on October 7. For private mortgage portfolios, softer collateral, softer rents and higher renewal rates arriving together is the combination that matters — and the benchmark index, not the headline average price, is the better gauge of collateral values.

The loonie is the other signal. It has weakened through the autumn even as oil rose, the reverse of the usual commodity-currency pattern, which suggests trade risk is weighing on it more than energy is supporting it.

Signal to Watch

Markets reopen Tuesday with US September CPI due October 13 and final softwood lumber review results expected around the same time. On October 16, CREA's September data and updated forecast arrive alongside CMHC's September housing starts. Next Monday, October 19, brings September CPI and the Bank of Canada's Q3 Business Outlook Survey — the last major domestic inputs before the October 28 decision and Monetary Policy Report.