Canada’s economy saw a boost in September, with 47,000 jobs added and the unemployment rate falling to 6.5%, marking the first decline since January, according to Statistics Canada. This comes after four consecutive months of little change in employment figures.
The employment surge was largely driven by gains among youth and women aged 25 to 54, with full-time employment seeing its most significant increase since May 2022. Despite these positive numbers, the employment rate continued its downward trend due to Canada’s growing population, as job growth has not kept pace with population expansion.
The unemployment rate had been steadily rising over the past 18 months, reaching 6.6% in August. However, inflation also eased to 2% in August—the lowest in over three years—thanks to lower gas prices, which helped the Bank of Canada reach its inflation target.
The central bank has responded to the cooling inflation by cutting interest rates three times this year, and further rate cuts are expected as the labor market shows signs of softening.
While job gains were made in September, Statistics Canada noted that the overall employment rate was lower, as the population aged 15 and older grew by 3.6% year-over-year, outpacing employment growth of 1.5% over the same period.
Several sectors saw notable job increases in September, including the information, culture, and recreation industry, which grew by 2.6%, particularly in Quebec. The wholesale and retail trade sectors also experienced a modest rise of 0.8%, marking the first increase since January, while employment in professional, scientific, and technical services rose by 1.1%.
Average hourly wages increased by 4.6% year-over-year, reaching $35.59, although this was a slowdown from the 5% wage growth seen in August.
Despite these overall gains, disparities in unemployment rates persist among different demographics. Unemployment among Black and South Asian Canadians aged 25 to 54 increased year-over-year in September. Black Canadians in this age group faced an 11% unemployment rate, while South Asian Canadians saw a 7.3% rate. In contrast, non-racialized, non-Indigenous Canadians experienced a lower unemployment rate of 4.4%.