Canada’s job market showed unexpected strength in September, with the economy adding 60,400 new positions, according to data from Statistics Canada. Despite the strong hiring numbers, the national unemployment rate remained unchanged at 7.1 percent as more Canadians entered the labour force.
The gains were led by increases in full-time employment, particularly in the manufacturing sector, which added 27,800 jobs. Agriculture, healthcare, and various service industries also recorded notable increases. The employment rate, representing the share of the working-age population currently employed, rose slightly to 60.6 percent. Analysts had expected a modest gain of only 5,000 jobs, making September’s report one of the strongest surprises of the year.
The surge in factory employment suggests that parts of the manufacturing industry may be benefiting from exemptions under the U.S.-Mexico-Canada Agreement (USMCA), providing a cushion against ongoing tariff tensions with the United States. Following the report, the Canadian dollar rose 0.3 percent against the U.S. dollar to $1.3980, while government bond yields climbed modestly.
Economists say the robust employment numbers could temporarily ease pressure on the Bank of Canada to cut interest rates later this month. Markets have now lowered the probability of an October 29 rate cut to around 25 percent from nearly 50 percent earlier. However, analysts caution that one strong month doesn’t signal a lasting turnaround. “A robust month doesn’t necessarily mean a new trend,” said Charles St-Arnaud, chief economist at Alberta Central, pointing to the June surge in hiring that was followed by two months of losses.
While September’s gains are encouraging, Canada’s economy has still lost a net total of 45,900 jobs over the past three months — the weakest quarter since the pandemic. Total hours worked fell by 0.2 percent last month, and the private sector added just under 22,000 jobs, compared to 30,700 in the public sector. Alberta led all provinces with 42,500 new positions, followed by Ontario with 8,800. Annual wage growth for permanent employees held steady at 3.6 percent, consistent with economists’ expectations.
