Measuring unemployment

The unemployment rate is the number of unemployed people divided by the labour force, the employed plus the unemployed. People flow into and out of unemployment every month, and the rate settles where the two flows balance: with a monthly separation rate $s$ and job-finding rate $f$, the steady-state unemployment rate is $u^* = s/(s + f)$.

Who is unemployed

Statistics Canada measures unemployment with the monthly Labour Force Survey (LFS). The survey covers people aged 15 and over living in the provinces, excluding people living on reserves, full-time members of the Canadian Armed Forces and people in institutions. It classifies each person by what they did in a reference week, usually the week containing the 15th of the month:¹

• Employed: did any work for pay or profit, or had a job but was absent from it (illness, vacation, family responsibilities).
• Unemployed: had no work, was available for work, and either looked for work in the past four weeks, was on temporary layoff expecting recall, or had a job starting within four weeks.
• Not in the labour force: everyone else, including students who are not looking, retirees, and people who want a job but have stopped searching.

US statistics, which Borjas uses, count people aged 16 and over rather than 15. Measuring the labour market covers the survey and its definitions in detail. With $E$ employed, $U$ unemployed and $P$ people aged 15 and over:

$$u = \frac{U}{E + U}, \qquad \text{participation rate} = \frac{E + U}{P}, \qquad \text{employment rate} = \frac{E}{P}.$$

In 2025 the LFS estimated 21.03 million employed and 1.54 million unemployed Canadians out of 34.57 million aged 15 and over. The labour force was 22.57 million, so the unemployment rate was $1.539 / 22.568 = 6.8$ percent, the participation rate $22.568 / 34.569 = 65.3$ percent and the employment rate $21.029 / 34.569 = 60.8$ percent.²

Stocks and flows

The unemployed are a stock, and the monthly flows in and out are large relative to it. Matching LFS respondents across months, Statistics Canada found that from February 2016 to September 2018 an average month saw 1.1 percent of the employed become unemployed, 21.7 percent of the unemployed find a job, 16.9 percent of the unemployed leave the labour force and 2.6 percent of people outside the labour force start looking for work.³

The steady-state unemployment rate

Take a labour force of fixed size $L = E + U$ and ignore movements in and out of the labour force. Each month a fraction $s$ of the employed lose or leave their jobs, the separation rate, and a fraction $f$ of the unemployed find one, the job-finding rate. Both rates are constant.

The pool of unemployed gains $sE$ people a month and loses $fU$. In a steady state the unemployment rate does not change, so the two flows are equal:

$$sE = fU.$$

Substitute $E = L - U$ and solve for the unemployment rate:

$$s(L - U) = fU \;\Rightarrow\; sL = (s + f)\,U \;\Rightarrow\; u^* = \frac{U}{L} = \frac{s}{s + f}.$$

Textbooks use different letters for the two rates (for example $l$ for job loss and $h$ for hiring). The formula is always the separation rate over the sum of the separation and job-finding rates.

Separation rate, s (% of the employed per month)

1.5%

Job-finding rate, f (% of the unemployed per month)

23.5%

Steady-state unemployment rate, u^*

6.0%

Flow each way per month

1.41% of the labour force

Average spell of unemployment, 1/f

4.3 months

Open in Graph Lab

Figure 1. The monthly inflow into unemployment, $s(1 - u)$, and outflow, $fu$, as shares of the labour force. With $s$ = 1.5 percent and $f$ = 23.5 percent a month they balance at $u^*$ = 6.0 percent; a higher $s$ or a lower $f$ raises $u^*$.

What moves $u^*$:

• A higher separation rate raises $u^*$, because more people enter the pool each month.
• A higher job-finding rate lowers $u^*$, because people leave the pool faster.
• Scaling both rates by the same factor leaves $u^*$ unchanged. A market with twice the job losses and twice the job findings has the same unemployment rate, with spells half as long.

Low separation rate, market A (% per month)

1.0%

High separation rate, market B (% per month)

2.5%

Market A: u^* with low s

4.1%

Market B: u^* with high s

9.6%

Average spell in both markets, 1/f

4.3 months

Open in Graph Lab

Figure 2. Two markets with the same job-finding rate, 23.5 percent a month, and separation rates of 1 percent (A) and 2.5 percent (B). B's steady state is 9.6 percent against A's 4.1 percent with the same average spell of 4.3 months: the difference is incidence, not duration.

The two-state formula is an approximation. With the 2016 to 2018 averages it gives $1.14/(1.14 + 21.70) = 5.0$ percent, below the 6.5 percent average measured over those months, because it leaves out people who enter unemployment from outside the labour force.

Adjustment to the steady state

Next month’s unemployed are this month’s, plus job losers, minus job finders: $U_{t+1} = U_t + sE_t - fU_t$. Dividing by $L$:

$$u_{t+1} = s + (1 - s - f)\,u_t, \qquad u_{t+1} - u^* = (1 - s - f)(u_t - u^*).$$

Each month the gap between the actual rate and the steady state shrinks by the factor $1 - s - f$. With $s + f$ near 0.25, three quarters of any gap remains after one month and less than half after three ($0.75^3 = 0.42$). The measured rate therefore stays close to the steady state implied by the current flow rates, and a change in the rate reflects a change in $s$ or $f$.

New separation rate, s (% per month)

2.0%

New job-finding rate, f (% per month)

18.0%

New steady state, s/(s + f)

10.0%

Rate after 3 months

8.0%

Rate after 12 months

9.7%

Months to close half the gap

3.1 months

Open in Graph Lab

Figure 3. A recession raises the separation rate from 1.5 to 2 percent and cuts the job-finding rate from 23.5 to 18 percent a month. Unemployment climbs from the old steady state of 6 percent toward the new one of 10 percent and reaches 8.0 percent within three months.

Key idea

The unemployment rate settles where the number of people losing jobs each month equals the number finding them: $u^* = s/(s + f)$. Anything that raises job loss or slows job finding raises it.

Worked example

A labour force has a separation rate of 1.5 percent and a job-finding rate of 23.5 percent a month. A recession raises the separation rate to 2 percent and lowers the job-finding rate to 18 percent.

1. Steady state before the recession. $u^* = 0.015 / (0.015 + 0.235) = 0.015 / 0.25 = 0.06$, or 6 percent.

2. Check that the flows balance. In a labour force of 1,000, 60 are unemployed and 940 employed. Inflow: $0.015 \times 940 = 14.1$. Outflow: $0.235 \times 60 = 14.1$.

3. Average spell. A spell ends with probability 0.235 each month, so it lasts $1/0.235 = 4.3$ months on average.

4. New steady state. $u^* = 0.02 / (0.02 + 0.18) = 0.10$, or 10 percent. The average spell rises to $1/0.18 = 5.6$ months.

5. One month into the recession. $u_1 = 0.02 + (1 - 0.02 - 0.18)(0.06) = 0.02 + 0.80 \times 0.06 = 0.068$, or 6.8 percent.

6. Three months in. The 4-point gap shrinks by the factor 0.8 each month: $0.04 \times 0.8^3 = 0.0205$, so $u_3 = 0.10 - 0.0205 = 0.0795$, or about 8.0 percent.

Exercise: what job-finding rate restores 6 percent unemployment if the separation rate stays at 2 percent?

Solve $0.06 = 0.02/(0.02 + f)$: $0.02 + f = 0.02/0.06 = 0.333$, so $f = 0.313$. Equivalently, $f = s(1 - u^*)/u^* = 0.02 \times 0.94 / 0.06 = 0.313$. Almost a third of the unemployed would have to find work each month, well above the 23.5 percent before the recession.

Incidence and duration

Rearranging the steady-state condition $s(1 - u^*) = fu^*$ gives

$$\frac{u^*}{1 - u^*} = \frac{s}{f} = s \times \frac{1}{f}.$$

The left side is the number of unemployed per employed worker. The right side is the incidence of unemployment, the share of workers who become unemployed each month, times the duration of a typical spell, $1/f$ months. A group can have high unemployment because spells are frequent, because they are long, or both.

Young workers have high incidence and short spells. In 2025 the unemployment rate was 13.8 percent for people aged 15 to 24 and 5.8 percent for those aged 25 to 54.² Yet unemployed youth had been looking for 15.9 weeks on average, against 23.6 weeks for unemployed 25-to-54-year-olds and 26.1 weeks for those 55 and over.⁴ Youth unemployment is mainly an incidence problem.

Long spells have become more common. The average unemployed person in 2025 had been looking for 21.8 weeks, up from 16.6 weeks in 2019, and 23 percent had been looking for 27 weeks or more, up from 15 percent.⁴ Two cautions apply to these numbers:

• The LFS records how long current spells have lasted so far, not how long they will last in total.
• A snapshot overweights long spells. If each month 9 people start a one-month spell and 1 person starts a twelve-month spell, 90 percent of spells are short, but at any moment 12 of the 21 unemployed people (57 percent) are in a long spell.

Long spells can feed on themselves: in a résumé audit study, Kroft, Lange and Notowidigdo found that callbacks fell with the length of the applicant’s unemployment spell, mostly within the first eight months.⁵

Types of unemployment

• Frictional unemployment: the time it takes to match workers and jobs, including new entrants and people moving between jobs or cities. It exists even in a boom and is partly productive, because search improves matches (job search).
• Seasonal unemployment: predictable swings within the year in construction, agriculture, fishing and tourism. Seasonally adjusted series remove it.
• Structural unemployment: a mismatch between the skills or locations of the unemployed and the jobs available, often after an industry or region declines. Spells are long because workers must retrain or move.
• Cyclical unemployment: the extra unemployment when labour demand falls in a recession (the business cycle).

Frictional and structural unemployment make up the natural rate of unemployment, the rate when there is no cyclical unemployment. It is well above zero.

What the official rate leaves out

The official rate counts only people who searched, are on temporary layoff or have a job lined up. Three groups sit just outside it:

• Discouraged searchers want work and are available, but did not look because they believe no suitable work is available. They are not in the labour force.
• The waiting group is not searching because it is waiting for recall, for replies to applications, or for a job that starts in more than four weeks.
• Involuntary part-timers work part time because they could not find full-time work. They count as employed.

Statistics Canada publishes eight measures, R1 to R8, that narrow or widen the definition.⁶

Measure	What it counts	2025
R1	Unemployed one year or more	0.9%
R2	Unemployed three months or more	2.7%
R3	Official rate adjusted to US definitions	5.8%
R4	Official rate	6.8%
R5	R4 plus discouraged searchers	7.0%
R6	R4 plus the waiting group	7.4%
R7	R4 plus the underused part of involuntary part-time work, in full-time equivalents	8.2%
R8	R4 plus all three groups	9.1%

The gap between R8 and R4 widens in downturns: 2.3 percentage points in 2019 and 3.4 in 2020.⁶ When jobs are scarce, more people stop searching and drop out of the labour force, which lowers the official rate without anyone finding work. This discouraged worker effect usually outweighs the added worker effect, family members entering the labour force when the main earner loses a job, so participation falls in recessions (labour supply over the business cycle). Canada’s participation rate fell from 66.0 percent in 2019 to 64.4 percent in 2020.²

Canada’s record

Unemployment rate, Canada

Monthly, seasonally adjusted, population aged 15 and over

Canada's unemployment rate, monthly, seasonally adjusted. Recession peaks were 13.1 percent (December 1982), 12.1 percent (November 1992) and 8.8 percent (mid-2009); the series high, 14.2 percent, came in May 2020.Source: Statistics Canada, Table 14-10-0287-01, Labour force characteristics, monthly, seasonally adjusted and trend-cycle. Retrieved 2026-10-23.

Show the data and notes

Seasonally adjusted Labour Force Survey estimates, both genders; revised periodically. The Labour Force Survey covers the 10 provinces; it excludes the territories, people living on reserves, full-time members of the Canadian Armed Forces and people living in institutions.

Period	Unemployment rate
Jan 1976	7.1%
Feb 1976	7.0%
Mar 1976	6.7%
Apr 1976	6.8%
May 1976	6.9%
Jun 1976	6.9%
Jul 1976	7.4%
Aug 1976	7.1%
Sep 1976	7.0%
Oct 1976	7.4%
Nov 1976	7.4%
Dec 1976	7.5%
Jan 1977	7.6%
Feb 1977	7.9%
Mar 1977	7.8%
Apr 1977	7.9%
May 1977	7.8%
Jun 1977	7.8%
Jul 1977	8.1%
Aug 1977	8.2%
Sep 1977	8.3%
Oct 1977	8.4%
Nov 1977	8.5%
Dec 1977	8.5%
Jan 1978	8.3%
Feb 1978	8.3%
Mar 1978	8.5%
Apr 1978	8.4%
May 1978	8.6%
Jun 1978	8.4%
Jul 1978	8.3%
Aug 1978	8.4%
Sep 1978	8.4%
Oct 1978	8.2%
Nov 1978	8.3%
Dec 1978	8.3%
Jan 1979	8.2%
Feb 1979	8.0%
Mar 1979	7.9%
Apr 1979	8.0%
May 1979	7.6%
Jun 1979	7.4%
Jul 1979	7.2%
Aug 1979	7.1%
Sep 1979	7.0%
Oct 1979	7.2%
Nov 1979	7.2%
Dec 1979	7.2%
Jan 1980	7.5%
Feb 1980	7.6%
Mar 1980	7.6%
Apr 1980	7.7%
May 1980	7.8%
Jun 1980	7.7%
Jul 1980	7.6%
Aug 1980	7.6%
Sep 1980	7.3%
Oct 1980	7.3%
Nov 1980	7.2%
Dec 1980	7.3%
Jan 1981	7.4%
Feb 1981	7.4%
Mar 1981	7.4%
Apr 1981	7.1%
May 1981	7.2%
Jun 1981	7.2%
Jul 1981	7.2%
Aug 1981	7.1%
Sep 1981	8.1%
Oct 1981	8.3%
Nov 1981	8.3%
Dec 1981	8.7%
Jan 1982	8.6%
Feb 1982	8.9%
Mar 1982	9.3%
Apr 1982	9.8%
May 1982	10.3%
Jun 1982	11.1%
Jul 1982	11.9%
Aug 1982	12.0%
Sep 1982	12.4%
Oct 1982	12.9%
Nov 1982	12.9%
Dec 1982	13.1%
Jan 1983	12.7%
Feb 1983	12.7%
Mar 1983	12.5%
Apr 1983	12.4%
May 1983	12.4%
Jun 1983	12.4%
Jul 1983	11.9%
Aug 1983	11.7%
Sep 1983	11.4%
Oct 1983	11.3%
Nov 1983	11.3%
Dec 1983	11.3%
Jan 1984	11.3%
Feb 1984	11.3%
Mar 1984	11.3%
Apr 1984	11.5%
May 1984	11.7%
Jun 1984	11.3%
Jul 1984	11.2%
Aug 1984	11.3%
Sep 1984	11.8%
Oct 1984	11.3%
Nov 1984	11.4%
Dec 1984	11.1%
Jan 1985	10.6%
Feb 1985	10.8%
Mar 1985	11.0%
Apr 1985	10.8%
May 1985	10.6%
Jun 1985	10.7%
Jul 1985	10.4%
Aug 1985	10.3%
Sep 1985	10.2%
Oct 1985	10.3%
Nov 1985	10.3%
Dec 1985	10.1%
Jan 1986	9.8%
Feb 1986	9.9%
Mar 1986	9.8%
Apr 1986	9.7%
May 1986	9.5%
Jun 1986	9.6%
Jul 1986	9.6%
Aug 1986	9.6%
Sep 1986	9.5%
Oct 1986	9.4%
Nov 1986	9.4%
Dec 1986	9.5%
Jan 1987	9.5%
Feb 1987	9.5%
Mar 1987	9.4%
Apr 1987	9.2%
May 1987	8.9%
Jun 1987	8.9%
Jul 1987	8.7%
Aug 1987	8.6%
Sep 1987	8.4%
Oct 1987	8.3%
Nov 1987	8.2%
Dec 1987	8.0%
Jan 1988	8.1%
Feb 1988	7.8%
Mar 1988	7.8%
Apr 1988	7.7%
May 1988	7.8%
Jun 1988	7.6%
Jul 1988	7.8%
Aug 1988	7.8%
Sep 1988	7.8%
Oct 1988	7.8%
Nov 1988	7.8%
Dec 1988	7.5%
Jan 1989	7.5%
Feb 1989	7.6%
Mar 1989	7.5%
Apr 1989	7.8%
May 1989	7.7%
Jun 1989	7.5%
Jul 1989	7.5%
Aug 1989	7.3%
Sep 1989	7.3%
Oct 1989	7.2%
Nov 1989	7.5%
Dec 1989	7.7%
Jan 1990	7.9%
Feb 1990	7.7%
Mar 1990	7.3%
Apr 1990	7.6%
May 1990	7.8%
Jun 1990	7.6%
Jul 1990	7.9%
Aug 1990	8.1%
Sep 1990	8.5%
Oct 1990	8.8%
Nov 1990	9.1%
Dec 1990	9.5%
Jan 1991	9.8%
Feb 1991	10.2%
Mar 1991	10.5%
Apr 1991	10.3%
May 1991	10.2%
Jun 1991	10.5%
Jul 1991	10.5%
Aug 1991	10.5%
Sep 1991	10.3%
Oct 1991	10.3%
Nov 1991	10.4%
Dec 1991	10.3%
Jan 1992	10.4%
Feb 1992	10.5%
Mar 1992	10.9%
Apr 1992	10.7%
May 1992	10.9%
Jun 1992	11.4%
Jul 1992	11.3%
Aug 1992	11.7%
Sep 1992	11.6%
Oct 1992	11.4%
Nov 1992	12.1%
Dec 1992	11.7%
Jan 1993	11.2%
Feb 1993	11.0%
Mar 1993	11.2%
Apr 1993	11.6%
May 1993	11.6%
Jun 1993	11.7%
Jul 1993	11.6%
Aug 1993	11.2%
Sep 1993	11.5%
Oct 1993	11.3%
Nov 1993	11.2%
Dec 1993	11.4%
Jan 1994	11.4%
Feb 1994	11.1%
Mar 1994	10.6%
Apr 1994	10.9%
May 1994	10.7%
Jun 1994	10.3%
Jul 1994	10.1%
Aug 1994	10.2%
Sep 1994	10.1%
Oct 1994	10.0%
Nov 1994	9.7%
Dec 1994	9.6%
Jan 1995	9.6%
Feb 1995	9.6%
Mar 1995	9.7%
Apr 1995	9.5%
May 1995	9.5%
Jun 1995	9.5%
Jul 1995	9.6%
Aug 1995	9.5%
Sep 1995	9.2%
Oct 1995	9.3%
Nov 1995	9.2%
Dec 1995	9.4%
Jan 1996	9.4%
Feb 1996	9.5%
Mar 1996	9.6%
Apr 1996	9.3%
May 1996	9.2%
Jun 1996	9.8%
Jul 1996	9.7%
Aug 1996	9.4%
Sep 1996	9.9%
Oct 1996	9.9%
Nov 1996	9.9%
Dec 1996	9.7%
Jan 1997	9.5%
Feb 1997	9.5%
Mar 1997	9.3%
Apr 1997	9.4%
May 1997	9.4%
Jun 1997	9.1%
Jul 1997	8.9%
Aug 1997	8.9%
Sep 1997	8.8%
Oct 1997	8.9%
Nov 1997	8.9%
Dec 1997	8.5%
Jan 1998	8.8%
Feb 1998	8.6%
Mar 1998	8.4%
Apr 1998	8.3%
May 1998	8.3%
Jun 1998	8.4%
Jul 1998	8.3%
Aug 1998	8.1%
Sep 1998	8.2%
Oct 1998	8.0%
Nov 1998	8.0%
Dec 1998	8.1%
Jan 1999	7.9%
Feb 1999	7.9%
Mar 1999	7.9%
Apr 1999	8.2%
May 1999	7.9%
Jun 1999	7.6%
Jul 1999	7.6%
Aug 1999	7.4%
Sep 1999	7.5%
Oct 1999	7.2%
Nov 1999	6.9%
Dec 1999	6.8%
Jan 2000	6.8%
Feb 2000	6.9%
Mar 2000	6.9%
Apr 2000	6.7%
May 2000	6.6%
Jun 2000	6.7%
Jul 2000	6.8%
Aug 2000	7.0%
Sep 2000	6.9%
Oct 2000	7.0%
Nov 2000	6.9%
Dec 2000	6.8%
Jan 2001	6.9%
Feb 2001	7.0%
Mar 2001	7.1%
Apr 2001	7.1%
May 2001	7.0%
Jun 2001	7.2%
Jul 2001	7.1%
Aug 2001	7.2%
Sep 2001	7.2%
Oct 2001	7.3%
Nov 2001	7.5%
Dec 2001	8.1%
Jan 2002	8.0%
Feb 2002	7.9%
Mar 2002	7.9%
Apr 2002	7.7%
May 2002	7.8%
Jun 2002	7.6%
Jul 2002	7.6%
Aug 2002	7.4%
Sep 2002	7.6%
Oct 2002	7.6%
Nov 2002	7.5%
Dec 2002	7.6%
Jan 2003	7.5%
Feb 2003	7.5%
Mar 2003	7.4%
Apr 2003	7.6%
May 2003	7.8%
Jun 2003	7.6%
Jul 2003	7.7%
Aug 2003	7.8%
Sep 2003	7.9%
Oct 2003	7.6%
Nov 2003	7.4%
Dec 2003	7.3%
Jan 2004	7.3%
Feb 2004	7.3%
Mar 2004	7.3%
Apr 2004	7.2%
May 2004	7.1%
Jun 2004	7.2%
Jul 2004	7.1%
Aug 2004	7.0%
Sep 2004	6.9%
Oct 2004	7.1%
Nov 2004	7.2%
Dec 2004	7.1%
Jan 2005	6.9%
Feb 2005	7.0%
Mar 2005	6.9%
Apr 2005	6.7%
May 2005	7.0%
Jun 2005	6.8%
Jul 2005	6.7%
Aug 2005	6.7%
Sep 2005	6.7%
Oct 2005	6.7%
Nov 2005	6.3%
Dec 2005	6.6%
Jan 2006	6.7%
Feb 2006	6.6%
Mar 2006	6.5%
Apr 2006	6.5%
May 2006	6.2%
Jun 2006	6.3%
Jul 2006	6.5%
Aug 2006	6.5%
Sep 2006	6.5%
Oct 2006	6.3%
Nov 2006	6.5%
Dec 2006	6.3%
Jan 2007	6.4%
Feb 2007	6.3%
Mar 2007	6.3%
Apr 2007	6.3%
May 2007	6.2%
Jun 2007	6.1%
Jul 2007	6.0%
Aug 2007	6.0%
Sep 2007	6.0%
Oct 2007	6.0%
Nov 2007	6.1%
Dec 2007	6.2%
Jan 2008	6.1%
Feb 2008	6.1%
Mar 2008	6.2%
Apr 2008	6.2%
May 2008	6.2%
Jun 2008	6.1%
Jul 2008	6.2%
Aug 2008	6.2%
Sep 2008	6.3%
Oct 2008	6.4%
Nov 2008	6.7%
Dec 2008	7.0%
Jan 2009	7.5%
Feb 2009	8.1%
Mar 2009	8.4%
Apr 2009	8.4%
May 2009	8.7%
Jun 2009	8.8%
Jul 2009	8.8%
Aug 2009	8.7%
Sep 2009	8.5%
Oct 2009	8.6%
Nov 2009	8.6%
Dec 2009	8.6%
Jan 2010	8.4%
Feb 2010	8.4%
Mar 2010	8.3%
Apr 2010	8.2%
May 2010	8.2%
Jun 2010	8.0%
Jul 2010	8.2%
Aug 2010	8.2%
Sep 2010	8.2%
Oct 2010	8.1%
Nov 2010	7.9%
Dec 2010	7.8%
Jan 2011	7.8%
Feb 2011	7.8%
Mar 2011	7.8%
Apr 2011	7.8%
May 2011	7.7%
Jun 2011	7.7%
Jul 2011	7.4%
Aug 2011	7.4%
Sep 2011	7.5%
Oct 2011	7.5%
Nov 2011	7.6%
Dec 2011	7.5%
Jan 2012	7.7%
Feb 2012	7.6%
Mar 2012	7.4%
Apr 2012	7.4%
May 2012	7.6%
Jun 2012	7.4%
Jul 2012	7.3%
Aug 2012	7.4%
Sep 2012	7.4%
Oct 2012	7.4%
Nov 2012	7.4%
Dec 2012	7.3%
Jan 2013	7.1%
Feb 2013	7.1%
Mar 2013	7.3%
Apr 2013	7.2%
May 2013	7.1%
Jun 2013	7.2%
Jul 2013	7.3%
Aug 2013	7.3%
Sep 2013	7.1%
Oct 2013	7.3%
Nov 2013	7.1%
Dec 2013	7.4%
Jan 2014	7.3%
Feb 2014	7.3%
Mar 2014	7.1%
Apr 2014	7.1%
May 2014	7.3%
Jun 2014	7.2%
Jul 2014	7.1%
Aug 2014	7.0%
Sep 2014	7.0%
Oct 2014	6.8%
Nov 2014	6.8%
Dec 2014	6.7%
Jan 2015	6.8%
Feb 2015	6.9%
Mar 2015	6.9%
Apr 2015	7.0%
May 2015	6.9%
Jun 2015	6.9%
Jul 2015	7.0%
Aug 2015	7.1%
Sep 2015	7.1%
Oct 2015	7.0%
Nov 2015	7.1%
Dec 2015	7.3%
Jan 2016	7.2%
Feb 2016	7.3%
Mar 2016	7.2%
Apr 2016	7.3%
May 2016	7.1%
Jun 2016	7.0%
Jul 2016	7.0%
Aug 2016	6.9%
Sep 2016	7.0%
Oct 2016	6.9%
Nov 2016	6.8%
Dec 2016	6.9%
Jan 2017	6.9%
Feb 2017	6.6%
Mar 2017	6.7%
Apr 2017	6.5%
May 2017	6.6%
Jun 2017	6.5%
Jul 2017	6.3%
Aug 2017	6.2%
Sep 2017	6.2%
Oct 2017	6.3%
Nov 2017	6.2%
Dec 2017	6.0%
Jan 2018	5.9%
Feb 2018	6.0%
Mar 2018	5.8%
Apr 2018	5.8%
May 2018	5.9%
Jun 2018	6.0%
Jul 2018	5.9%
Aug 2018	6.0%
Sep 2018	5.8%
Oct 2018	5.6%
Nov 2018	5.7%
Dec 2018	5.6%
Jan 2019	5.7%
Feb 2019	5.8%
Mar 2019	5.8%
Apr 2019	5.7%
May 2019	5.5%
Jun 2019	5.6%
Jul 2019	5.7%
Aug 2019	5.7%
Sep 2019	5.6%
Oct 2019	5.6%
Nov 2019	5.9%
Dec 2019	5.6%
Jan 2020	5.5%
Feb 2020	5.8%
Mar 2020	8.5%
Apr 2020	13.7%
May 2020	14.2%
Jun 2020	12.6%
Jul 2020	10.9%
Aug 2020	10.1%
Sep 2020	9.1%
Oct 2020	9.0%
Nov 2020	8.6%
Dec 2020	8.9%
Jan 2021	9.2%
Feb 2021	8.5%
Mar 2021	7.7%
Apr 2021	8.2%
May 2021	8.3%
Jun 2021	7.9%
Jul 2021	7.4%
Aug 2021	7.1%
Sep 2021	7.0%
Oct 2021	6.5%
Nov 2021	6.1%
Dec 2021	5.9%
Jan 2022	6.4%
Feb 2022	5.5%
Mar 2022	5.4%
Apr 2022	5.4%
May 2022	5.2%
Jun 2022	4.9%
Jul 2022	4.8%
Aug 2022	5.2%
Sep 2022	5.1%
Oct 2022	5.1%
Nov 2022	5.0%
Dec 2022	5.0%
Jan 2023	5.1%
Feb 2023	5.2%
Mar 2023	5.1%
Apr 2023	5.1%
May 2023	5.2%
Jun 2023	5.4%
Jul 2023	5.4%
Aug 2023	5.4%
Sep 2023	5.5%
Oct 2023	5.7%
Nov 2023	5.8%
Dec 2023	5.8%
Jan 2024	5.7%
Feb 2024	5.9%
Mar 2024	6.1%
Apr 2024	6.2%
May 2024	6.3%
Jun 2024	6.4%
Jul 2024	6.4%
Aug 2024	6.6%
Sep 2024	6.5%
Oct 2024	6.6%
Nov 2024	7.0%
Dec 2024	6.7%
Jan 2025	6.7%
Feb 2025	6.6%
Mar 2025	6.8%
Apr 2025	6.9%
May 2025	7.0%
Jun 2025	6.9%
Jul 2025	6.9%
Aug 2025	7.1%
Sep 2025	7.1%
Oct 2025	6.9%
Nov 2025	6.6%
Dec 2025	6.8%
Jan 2026	6.5%
Feb 2026	6.7%
Mar 2026	6.7%
Apr 2026	6.9%
May 2026	6.6%
Jun 2026	6.5%
Jul 2026	6.4%
Aug 2026	6.4%
Sep 2026	6.5%

The peaks of the 1980s and 1990s came down slowly: the rate was still 11.3 percent at the end of 1983 and 11.4 percent at the end of 1993. The 2020 spike was larger and much shorter. The rate rose from 5.8 percent in February 2020 to 14.2 percent in May, fell to 5.9 percent by December 2021 and reached the series low of 4.8 percent in July 2022. It rose again to 7.1 percent in August and September 2025 and was 6.5 percent in September 2026. The number of unemployed people on temporary layoff, who expect to be recalled, averaged 451,400 in 2020, against 52,800 in 2019.⁷

Unemployment rate by province, 2025

Annual average, population aged 15 and over

Canada6.8%

Newfoundland and Labrador10.1%

Prince Edward Island8.0%

Nova Scotia6.6%

New Brunswick7.1%

Quebec5.6%

Ontario7.7%

Manitoba5.9%

Saskatchewan5.2%

Alberta7.2%

British Columbia6.2%

Unemployment rate by province, 2025 annual average. Newfoundland and Labrador had the highest rate, 10.1 percent, and Saskatchewan the lowest, 5.2 percent, against 6.8 percent for Canada.Source: Statistics Canada, Table 14-10-0327-01, Labour force characteristics by gender and detailed age group, annual. Retrieved 2026-10-23.

Show the data and notes

Annual average of monthly Labour Force Survey estimates, both genders. The Labour Force Survey covers the 10 provinces; it excludes the territories, people living on reserves, full-time members of the Canadian Armed Forces and people living in institutions.

Category	Unemployment rate
Canada	6.8%
Newfoundland and Labrador	10.1%
Prince Edward Island	8.0%
Nova Scotia	6.6%
New Brunswick	7.1%
Quebec	5.6%
Ontario	7.7%
Manitoba	5.9%
Saskatchewan	5.2%
Alberta	7.2%
British Columbia	6.2%

Regional gaps persist: Newfoundland and Labrador’s rate has been above the national rate in every year since at least 2006,² reflecting structural and seasonal unemployment as well as the cycle. Employment Insurance sets its rules by regional unemployment rates.

Common mistakes

Traps on exams

• Dividing by the population. The unemployment rate divides by the labour force, $E + U$. Only the participation and employment rates divide by the population.
• Reading a falling rate as job growth. Discouraged searchers who stop looking leave the labour force and lower the rate without anyone finding work.
• Thinking a steady state has no job losses. In a steady state the inflow equals the outflow; both are large.
• Mixing units in the formula. $s/(s + f)$ uses two rates over the same period. Do not combine a monthly separation rate with an annual job-finding rate, or plug in counts.

On the exam

Write the steady-state condition in words first: “people losing jobs each month equal people finding jobs each month”, then $sE = fU$, then the algebra. To draw it, put the unemployment rate on the horizontal axis, the inflow line falling from $s$ at $u = 0$, the outflow line rising from the origin with slope $f$, and label the crossing $u^*$.

Check yourself

1.

A town has 50,000 residents aged 15 and over. The Labour Force Survey counts 31,200 employed and 1,800 unemployed. What is the unemployment rate, in percent? Round to two decimals.

Your answer (percent)

Check answer

2.

In the steady state of the two-state model of unemployment, which statement is true?

1The number of people who lose jobs each month equals the number who find jobs2The separation rate equals the job-finding rate3Nobody loses a job, so the unemployment rate stays constant4The unemployment rate equals the separation rate

Check answer

3.

During a recession, 20,000 unemployed people in a province stop looking for work because they believe no jobs are available. Nothing else changes. What happens to the province's unemployment rate and participation rate?

1Both fall2The unemployment rate rises and the participation rate is unchanged3Neither changes, because the 20,000 people are still without jobs4The unemployment rate falls and the participation rate is unchanged

Check answer

Practise more questions on this topic

Sources

1. Statistics Canada, Guide to the Labour Force Survey, 2025 edition, Catalogue no. 71-543-G. ↩

2. Statistics Canada, Table 14-10-0327-01, Labour force characteristics by gender and detailed age group, annual. ↩ ↩² ↩³ ↩⁴

3. Bourbeau, E. (2019). Labour market dynamics since the 2008/2009 recession. Labour Statistics: Research Papers, Statistics Canada Catalogue no. 75-004-M. Transition rates from Table 4. ↩

4. Statistics Canada, Table 14-10-0057-01, Duration of unemployment, annual. ↩ ↩²

5. Kroft, K., Lange, F. and Notowidigdo, M. J. (2013). Duration dependence and labor market conditions: Evidence from a field experiment. Quarterly Journal of Economics, 128(3), 1123 to 1167. NBER working paper 18387. ↩

6. Statistics Canada, Table 14-10-0078-01, Supplementary unemployment rates, annual. Definitions from the notes to Table 14-10-0077-01. ↩ ↩²

7. Statistics Canada, Table 14-10-0126-01, Reason for leaving job during previous year, annual. ↩