Ottawa — Canada’s labour market delivered a stronger-than-expected performance in September, adding 60,000 new jobs, according to Statistics Canada’s latest Labour Force Survey. But despite the surge, economists caution that the numbers may not signal a genuine economic rebound and are unlikely to shift the Bank of Canada’s stance on interest rates later this month.
The report, released on October 10, showed that job gains were concentrated among core-aged workers (25 to 54), for both men and women. The biggest increases came from manufacturing, health care and social assistance, and agriculture, with manufacturing recording its first employment growth since January.
Wages also continued to rise, with the average hourly wage increasing 3.3% compared to a year earlier — a sign that some workers are enjoying modest pay gains even amid a cooling economy.
The upbeat numbers surprised many forecasters. Economists at Toronto-Dominion Bank had expected only a 5,000-job increase, citing unusual statistical fluctuations and shifting population dynamics rather than strong underlying growth.
“TD is encouraging Canadians to stay cool as this fall’s jobs data looks shaky, arguing that unusual stats and changing population trends — rather than genuine economic trouble — are behind the softer-looking labour market,” the bank said in a statement.
The positive September figures stand in contrast to August, when Canada recorded back-to-back job losses totalling 66,000 positions, the highest two-month decline in nine years.
Job Gains Not Evenly Shared
Despite the overall hiring surge, not all groups benefited. Among Canadians aged 55 and older, the employment rate slipped, with 44,000 jobs lost nationwide in that age group.
Youth unemployment remains a persistent challenge. The unemployment rate for Canadians aged 15–24 rose to 14.7%, its highest level since September 2010. The increase was driven primarily by rising unemployment among students, while job-seeking rates for non-students held steady year-over-year.
The survey also introduced new data on skills mismatches, revealing that more than 40% of recent immigrants (those in Canada for five years or less) were working in jobs unrelated to their education or training. Many cited a lack of available positions in their field or barriers to finding work aligned with their qualifications.
Monetary Policy Implications
The Bank of Canada will announce its next key interest rate decision on October 29, and economists say the September labour data is unlikely to sway policymakers toward a more aggressive stance.
RBC assistant chief economist Nathan Janzen told The Canadian Press that while manufacturing jobs showed resilience, overall job growth is still not keeping pace with population expansion.
“We have yet to really see those concentrated trade impacts spreading more broadly to the rest of the economy,” Janzen said, pointing to ongoing structural weakness.
CIBC Capital Markets economist Andrew Grantham agreed, noting that July and August’s economic softness cannot be overlooked.
“The economy is not in a position to absorb the slack that exists in the labour market,” Grantham said in the Financial Post. “Because of that, we continue to forecast a further interest rate cut from the Bank of Canada later this month, although upcoming consumer price index data remains important to that view.”
Bottom Line
While Canada’s September hiring surge offers a brief bright spot, analysts warn it may reflect statistical noise rather than the beginning of a sustained recovery. With youth unemployment rising, older workers losing jobs, and skill mismatches persisting, the Bank of Canada faces a complex landscape as it weighs its next move on interest rates.