Shrinkage

Well, that was ugly.

The dollar slipped into the 69-cent range and economists across the land were too shamed to go to work this morning after we all heard then news. Canada lost a stunning 68,300 jobs last month, atop the 41,700 shed in August. For the year as a whole we’re running in the red now – down over forty thousand paycheques, when last year we added more than 211,000.

Boy, did Bay Street ever get this one wrong.

Just hours before the stats were released one of the (usually) most accurate bank economists, Derek Holt, published this note to clients:

Canada updates the state of the job market in September this morning (8:30amET). Last-minute stragglers boosted the median consensus estimate a little to 10k with a large -30k to +30k set of guesses. Most of the estimates lie within a 0-15k range (Scotia 0k).

Yes, the expectation was for no job growth. Or a modest gain. Not a Biblical loss.

To compare, with would be equal to the US shedding about 800,000 positions in a single month. That has happened twice outside of Covid: once during the 2009 financial crisis as Wall Stret banks collapsed, and prior to that in 1945 when war mobilization ended.

The last time Canada shed almost 70,000 jobs in a month was during the credit crisis of 2009. That’s when stock markets plunged, supply chains blew up, corporate credit evaporated and we all wondered if the grocery store down the street would close.

So, this is meaningful. And as a certain pathetic blog has been pointing out recently, it comes when we Canadians are busy shooting ourselves in the foot, or  worse place. Quebec just made a big mistake in electing a PQ government with separatist aspirations (praised by Elon Musk) and Alberta’s dangerous leaders have allowed a referendum on potential secession to take place in little more than a week.

Meanwhile we’re in the middle of a trade war with the global superpower, the White House has been helping the AB separatists, a new round of tariffs just whacked Canada and the rogue American president still wants to annex us by crushing our economy.

Other consequences today:

• Bond yields fell meaningfully on Canadian debt while they have been surging higher in the US and Europe.
• Odds of a Bank of Canada rate increase a week from next Wednesday evaporated. The CB is now expected to hold. An anticipated quarter-point hike in December is being called into question.
• The labour participation rate, at 64.8%, hit the lowest point in almost 30 years. It shows the population is aging, decrepit Boomers are shuffling off into the ether and a sharp reduction in immigration means fewer workers are around to replace them.
• The half-point decline in the dollar this morning as the news hit was substantial, abrupt and sobering.

Loonie jolted below 70 cents on jobs report

Mark Carney will likely lay blame on the Americans, since September was the first full month of the latest round of tariffs. Pierre Poilievre will blame Carney for his ‘failed’ economic policies and for not being as smart as him. The separatists, east and west, will tell their followers this is a failed state and they can do so much better on their own little dinghy in the middle of the swirling sea. Trump will say, well… whatever he says, we don’t care.

The rest if us will carry on, keeping our portfolios in place, staying calm, staying employed, staying invested, staying balanced and remaining optimistic. The TSX jumped today because rates are not going to swell higher increasing debt servicing costs, a lower dollar gives us insulation against some of Trump’s regressive tariffs, because AB secessionists will be handed their ass soon and since, compared to the dumpster fire south of the border – where public executions are apparently back and the president made 517 stock trades last month in companies he influenced – this is paradise.

Never lose perspective. Never cease being thankful.

About the picture: “I will be taking some time to work on my emotional baggage,” writes Tom, who’s beloved wife has just been institutionalized. “Mary Lou and I have been married for 54 years and known each for almost 60.  The current times are a chapter we never saw coming. And there are tears yet to come. The good news is that she is getting the proper care that she needs and seems to be adjusting reasonably well.  And Daxx the Therapy Dog and I will be learning a new bachelor life. Thank goodness for him.”

To be in touch or send a picture of your beast, ermail to ‘garth@garth.ca’.

Source: https://www.greaterfool.ca/2026/10/09/shrinkage-2/