Canada gained 67k new jobs in October (0.3% m/m), defying forecasters, and building on September’s gain. Gains through September and October have now offset losses in July and August. However, the details were mixed, with the private sector driving the increase (+73k), but positions were mainly part-time (+85K).
Job gains pushed the unemployment rate down two tenths to 6.9%, back to its level in July. Labour force growth has slowed sharply in 2025, but it continues to outpace job creation, with the unemployment rate still up three tenths from 6.6% in January.
Job gains were seen in wholesale and retail trade (+41k), transportation and warehousing (+30k) and information, culture and recreation (+25k). However, job losses were seen in construction (-15k).
Wage growth actually picked up in October with average hourly wages for employees up 3.5% versus a year ago, versus a 3.3% pace in September.
Key Implications
Canada’s job market has hit a double, with solid back-to-back job growth in September and October. The labour market is proving a bit more resilient to trade tensions than we had expected, but October’s data is not a home run. Zooming out, we see that the labour market has still softened through 2025 along a number of dimensions. Even with tighter immigration policy reducing labour force gains, the unemployment rate has risen, and wage pressures have cooled relative to a year ago.
This report will make the Bank of Canada more comfortable to sit on the sidelines and let the 275 basis points of rate cuts in this cycle work their way through the economy. While this report shows some resilience in Canada’s labour market, it is not strength. Overall job market conditions remain soft. The Bank expects reduced inflation pressures from a weak domestic economy to weigh against inflation pressures from to U.S. tariffs and restructuring global supply chains.
