In January 2026, Canada's unemployment rate declined to 6.5%, a decrease from December's 6.8% and below market expectations, marking the lowest unemployment rate in 18 months. This reduction indicates that fewer individuals were seeking employment. The drop partially reversed the increase seen in the previous month, with the number of unemployed individuals decreasing by 94,000 to approximately 1.5 million. Concurrently, the labor force decreased by about 94,000, causing the participation rate to decline from 65.4% to 65.0%. Despite recent trends of employment growth, net employment fell by 25,000 to 21.12 million. This decrease in employment was primarily due to a loss of 70,000 part-time jobs, which was somewhat compensated by an increase of 45,000 full-time positions.