Canada’s job market surprised economists in September 2025, adding 60,000 positions even as the unemployment rate remained steady at 7.1 per cent. The gains were largely driven by a rebound in the trade-sensitive manufacturing sector, along with health care, social assistance, and agriculture.
1. Overview of Canada’s September Jobs Report
Statistics Canada reported an unexpected boost of 60,000 jobs in September, marking a significant turnaround after months of losses. The unemployment rate stayed at 7.1 per cent.
2. Economists’ Forecast vs. Actual Gains
Economists predicted a modest gain of 5,000 jobs, but the outcome exceeded expectations. This improvement followed more than 100,000 job losses across July and August.
3. Full-Time vs. Part-Time Job Trends
September’s job growth came entirely from full-time positions. A total of 106,000 full-time jobs were created, offsetting a decline in part-time work.
4. Impact of U.S. Tariffs on Employment
Despite gains, Canada’s labour market has only seen a net addition of 22,000 jobs since January 2025. U.S. tariffs continue to pressure Canadian industries, particularly manufacturing.
5. Manufacturing Sector Sees First Growth in Months
Manufacturing added 28,000 positions, its first increase since January. However, the industry has still faced a net loss of 58,000 jobs in 2025 prior to this rebound.
6. Other Sectors Driving Employment
The health care and social assistance sector, along with agriculture, also contributed to job growth in September.
7. Industries Facing Job Losses
Wholesale and retail trade shed 21,000 jobs during the month, though the sector remains 61,000 positions higher than a year ago. Transportation and construction also reported job declines.
8. Wage Growth Across Canada
Average hourly wages rose 3.3% year-over-year in September, slightly higher than August’s increase, providing some relief for workers facing inflation pressures.
9. Rising Youth Unemployment Concerns
Youth unemployment hit 14.7% in September – the highest in 15 years outside the pandemic. Students returning to school saw an even higher jobless rate of 17.1%, a 3.1-point increase from last year.
10. Implications for the Bank of Canada’s Next Rate Decision
This report comes ahead of the Bank of Canada’s interest rate announcement on Oct. 29. The central bank recently cut rates to 2.5% to balance slowing growth against easing inflation pressures.