Canada’s job market surprised economists in September by adding 60,400 new jobs, even though the unemployment rate stayed at 7.1 per cent, Statistics Canada said Friday. Most experts had expected the economy to lose about 2,500 jobs and for unemployment to rise slightly to 7.2 per cent, based on forecasts from the Bank of Montreal.
While the results were stronger than expected, economists warned not to read too much into one report. BMO chief economist Douglas Porter said that job numbers have been “swinging wildly” over the past few months, calling September’s increase “a welcome bounce but hardly a trend.”
CIBC economist Andrew Grantham also pointed out that the big gain followed job losses in July and August. On average, Canada lost about 15,000 jobs per month over the last three months. “Today’s data still shows there’s a lot of slack in the job market,” Grantham said. “That supports another interest rate cut from the Bank of Canada, but this stronger report might delay it—especially if inflation stays high.”
TD economist Andrew Hencic agreed, saying the report makes it less likely the Bank of Canada will cut interest rates soon. The next inflation report is due October 21.
So far this year, total employment has risen only 0.1 per cent (22,000 jobs), and the share of Canadians working—called the employment rate—remains below its early-2025 peak. More people are looking for jobs, pushing the participation rate up to 65.2 per cent, while unemployment remains higher than it was in January.
Even with September’s jump, many experts said the high unemployment rate is a clearer sign that the economy is still weak. Desjardins economist Royce Mendes said the rise in jobs “doesn’t change the fact that unemployment hasn’t improved.”
Indeed Canada economist Brendon Bernard said the data suggests the job market is “gradually weakening,” not collapsing. That’s good news for people in steady jobs, he said, but tough for those still trying to find work.
Youth jobs hit hardest
Full-time employment rose by 106,000, while part-time work fell by 46,000. The public sector made up about half of the increase, adding 31,000 jobs, while private-sector and self-employed workers saw smaller gains.
Most of the new jobs went to core-aged workers (25–54 years old)—with gains among both men and women. Employment among older Canadians (55+) fell by 44,000, and youth unemployment rose to 14.7 per cent, the highest since 2010 (excluding the pandemic).
“Young people are being left behind,” said Nora Jenkins Townson, founder of the HR firm Bright + Early. “Many employers are focusing on senior or short-term hires instead of investing in younger workers.”
Earlier, CIBC had predicted a smaller job gain of 25,000, partly because the end of summer jobs often boosts September’s numbers.
Job gains by industry and region
The manufacturing sector led the way with 28,000 new jobs, its first increase since January. Health care and agriculture also grew, while retail and wholesale trade lost 21,000 jobs.
Regionally, Alberta saw the biggest increase, adding 43,000 jobs and cutting its unemployment rate to 7.8 per cent. New Brunswick and Manitoba also gained jobs, while Ontario and Quebec stayed mostly flat. Ontario’s jobless rate rose to 7.9 per cent, up from a year ago.
Average hourly wages grew 3.3 per cent from last year, reaching $36.78, about the same pace as in August.
