Despite stronger-than-expected job growth, Canada’s unemployment rate held steady in September as more people entered the workforce.
📈 Job Growth Beats Expectations
According to Statistics Canada, employment rose by 60,400 jobs in September, well above forecasts that predicted only 5,000. Most of the gains came from full-time positions, showing that job quality is improving. The employment rate (the share of working-age Canadians who have a job) climbed slightly to 60.6%.
💼 Sectors that saw growth:
- Manufacturing: +27,800 jobs
- Agriculture, healthcare, and service industries also added workers
This growth shows some resilience in Canada’s job market, even amid slower economic activity and trade tensions.
💰 Market Reaction: Loonie Jumps
The Canadian dollar (loonie) strengthened after the report, rising about 0.3% to $1.3980 against the U.S. dollar. Short-term government bond yields also rose slightly, as traders scaled back bets on a near-term Bank of Canada rate cut. The odds of a rate reduction on October 29 fell from around 50% to just 25%.
⚠️ Not All Good News
Even with the strong headline number, Canada’s job market has lost a net 45,900 jobs over the past three months, marking the weakest quarter since the pandemic.
- Total hours worked fell 0.2% in September, suggesting productivity and demand remain soft.
- The labour force grew by 72,300, which explains why the jobless rate didn’t budge despite more people finding work.
🏦 What It Means for the Bank of Canada
The Bank of Canada recently cut its key rate to 2.5% in September to support the slowing economy.
However, these latest job numbers complicate things. Policymakers may hold off on another rate cut until December to see if the labour market truly cools.
Economists are divided:
“A robust month doesn’t necessarily mean a new trend,” said Charles St-Arnaud, Chief Economist at Alberta Central.
“There’s still plenty of slack in the labour market, which could justify another rate cut before year-end,” added Andrew Grantham of CIBC.
🌍 Regional and Wage Highlights
- Alberta led the country with 42,500 new jobs, followed by Ontario with 8,800.
- The private sector added 21,900 jobs, while the public sector rose by 30,700.
- Wage growth for permanent employees stayed steady at 3.6% year-over-year, in line with expectations.
🔍 The Bottom Line
✅ Canada’s job market delivered a surprise boost in September.
⚠️ But overall momentum remains weak, and unemployment is still elevated.
🏦 The next few months and the Bank of Canada’s upcoming rate decisions will reveal whether this rebound has staying power.
At Go Approval, we stay on top of every rate move and economic update so you can make informed, stress-free mortgage decisions.
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