After two consecutive months of job losses, Canada’s labour market showed renewed signs of life in September. Statistics Canada reported that employment rose by 60,000, lifting the national employment rate 0.1 percentage points to 60.6 per cent, while the unemployment rate held at 7.1 per cent.
A decline in part-time positions was offset by gains in full-time employment, and both the manufacturing and agriculture sectors posted their first increases since January.
Nearly half of the overall job gains came from manufacturing, where employment surged by 28,000 (+1.5 per cent), driven largely by Ontario and Alberta.
Provincially, Alberta recorded the strongest overall job growth, more than offsetting losses in July and August, while Manitoba and New Brunswick saw modest gains as well.
In the services sector, which accounts for the bulk of Canadian employment, activity was mixed. There were signs that consumer demand may be waning with employment falling in wholesale/retail trade (-20,800), transportation/warehousing (-7,400), and information/culture/recreation (-5,000), each down 0.7 per cent. In contrast, employment rose in knowledge and professional services, healthcare, and other private services. These broad fluctuations highlight the lack of a clear pattern in the economy and reflect the start-stop environment businesses continue to face.
The unemployment rate for core-aged workers (ages 25 to 54 years) fell slightly to 6.0 per cent in September from 6.1 per cent. Employment gains were concentrated in this demographic, with 109,000 jobs added, more than offsetting the 93,000 lost in August. In contrast, the youth unemployment rate rose to 14.7 per cent, the highest since September 2010. The fact that unemployment among core-aged workers remained steady is a stabilizing factor for the mortgage market, as unemployment is a key driver of mortgage defaults.
After significant declines in the prior two months, this employment report is certainly welcome. The soft labour market was a key driver of the Bank of Canada’s September rate cut. Given the broader slowing trend in the economy, we expect at least one more cut later this year. However, unless October CPI shows a marked decline, this employment report suggests the Bank will take a pause at its October meeting.
Housing Affordability Watch
CMI monitors the latest developments and offers insights on solutions to Canada’s housing affordability crisis
Canada’s social housing system is under strain, with waitlists in major cities stretching for years. The challenge isn’t just limited supply—mismatches between household size and unit size also contribute to the problem. Provincial regulations introduced in 2011 were designed to encourage municipalities to transfer overhoused tenants to appropriately sized units, yet many cities have been slow to act. The City of Hamilton’s recent policy changes show how targeted action can make better use of scarce social housing resources while being mindful of tenants’ needs.
Read more in our latest Housing Affordability Watch: Addressing Social Housing Mismatches Amid Government Inertia
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