Canada’s unemployment rate climbed to 6.8 per cent in December as an increase in people seeking work outpaced modest job gains at the end of the year, according to Statistics Canada.
The agency reported that the economy added 8,200 jobs in December, exceeding economists’ expectations. Despite the increase, the unemployment rate rose from 6.5 per cent in November as labour force growth continued to pressure the job market.
Employment gains in Ontario and Quebec failed to keep pace with the number of new job seekers in both provinces, contributing to higher unemployment rates in those jurisdictions.
Nationally, job growth was concentrated in full-time positions. The healthcare and social assistance sector led gains, adding 21,000 jobs during the month. Employment also rose in construction and in the “other services” category, which includes occupations ranging from hairdressers to auto mechanics.
Those increases were partly offset by losses in professional, scientific and technical services, which shed 18,000 jobs. The accommodation and food services sector also recorded declines. Manufacturing, a sector sensitive to trade conditions, added 4,300 jobs in December.
Average hourly wages increased 3.4 per cent year over year, easing slightly from a 3.6 per cent rise in November.
Economists surveyed by Reuters had expected employment to fall by 5,000 jobs in December, following strong gains of 181,000 positions over the previous three months.
Statistics Canada said the labour market faced headwinds from U.S. tariffs through much of 2025, though conditions improved somewhat for job seekers toward year’s end. The agency noted that young people continued to experience particular challenges.
Employment among workers aged 15 to 24 declined by 27,000 in December, reversing some of the gains seen in October and November. The youth unemployment rate rose by half a percentage point to 13.3 per cent to close out 2025. While that figure was below the 15-year high of 14.7 per cent recorded in September—outside the COVID-19 period—it remained elevated.
Friday’s employment report provides the final snapshot of labour market conditions ahead of the Bank of Canada’s first interest rate decision of the year, expected later this month.