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Canadian Employment (September 2024)

Leslie Preston, Managing Director & Senior Economist | 416-983-7053

Date Published: October 11, 2024

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Canada's labour market takes a break from its cooling trend in September

  • Canada's labour market bucked its weakening trend in September, adding 47k new jobs. Adding to the good news, the gains were entirely full-time (+112k), and in the private sector (+61k). Meanwhile part-time positions gave back their August gains (-65k). 
  • Job gains were strong enough to push the unemployment rate down a tenth to 6.5%, the first improvement since January. Labour force growth was modest in September (+16k), as the participation rate fell two tenths to 64.9%.  
  • Looking across sectors, job gains were concentrated in information, culture and recreation (+22k, 2.6%), wholesale and retail trade (+22k, 0.8%) and professional, scientific and technical services (+21k, 1.1%). 
  • The unemployment rate ticked down in September, driven entirely by youth. The unemployment rate for those aged 15-24 fell a full percentage point to 13.5%, but is still 2.8 percentage points higher than a year ago. Perhaps more telling is that the share of the core working age population (25-54 years) with a job continued to tick down. It has fallen 1.6 percentage points relative to the start of 2023.
  • In one gray cloud in the report, total hours worked fell again in September (-0.4% month-on-month), and are up 1.2% over the past year. Wage growth cooled to 4.6% year-on-year in September.             

Key Implications

  • A move down in Canada's unemployment rate is good news, and the two year bond yield is up a few tenths on the news. However, September's jobs report does not change the picture of a labour market that has cooled notably since the Bank of Canada started raising interest rates. Data rarely moves in a straight line, and we would need to see a few more months of strength before we declare an improving trend. 
  • The Bank of Canada's next interest rate decision is in less than two weeks, and another cut is widely expected. Some market participants are leaning towards a larger half point move after the Fed's larger cut, but September's job data will likely pare those bets back a bit. We look for another quarter-point interest rate cut on October 23rd.  

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