The unemployment rate in Canada has fallen as the number of job seekers has decreased.

Despite a significant drop in Canada's unemployment rate last month, the job market remains weak at the beginning of the new year. The unemployment rate fell to 6.5%, the lowest level since September 2024, while economists had previously expected the rate to hold steady at 6.8%. Despite the decrease in the unemployment rate, the number of employed persons decreased by 24,800, marking the first decline in five months. The root of this weakness lies in the decreased number of Canadians looking for work: the labor force participation rate dropped by 0.4 percentage points to 65%. In January, the Canadian population increased by 5,200 while the labor force population decreased by 119,000.