Canadian Employment (September 2025)

Canada's jobs jump up in September, unemployment rate steady as labour force surges

• Canada's economy added a staggering 60k jobs in September (+0.3% month/month), 55k more than consensus expectations for a 5k gain. The details were similarly strong with full-time positions jumping 106k, and the private sector rising 22K.
• The unemployment rate held steady at 7.1% in September, as the labour force more than made up for the past two months of losses, adding 72k workers. 
• Job gains were concentrated in manufacturing (+28k), health care and social assistance (+14k), and agriculture (+13k). The biggest losses were seen in wholesale and retail trade (-21k), construction (-8.2k), and transportation and warehousing (-7.4k). 
• Wage growth was steady in September with average hourly wages up 3.6% versus a year ago.                

Key Implications

• Well, that's quite the surprise. Canada's job market looks like it recovered almost all of August's losses in September. Importantly, even for a noisy data series, this is a strong result. That said, it's important to note that the unemployment rate remained unchanged as the labour force jumped by an even greater amount. Considering population growth slowed to 28k people, the biggest surprise was a large influx of new workers despite a weak job market. 
• The Bank of Canada's next decision is due at the end of the month and this surprise from the labour market could change the calculus on the decision. However, underlying inflation continues to hover within the target range and the unemployment rate suggest that the labour market still has excess slack. The next inflation report is due on the 21st and the bar will be even higher for inflation to underperform and bring the BoC onside for another rate cut. Markets seems to agree as the pricing for a rate cut materially deteriorated this morning.

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