A worker inspects sheets of stainless steel at Magna Stainless and Aluminum in Montreal in September.Christopher Katsarov/The Canadian Press
Canada’s economy posted a surprise 60,400 net job gains in September, almost entirely reversing the losses of the previous month, data showed on Friday, but was not enough to bring down its multiyear high unemployment rate.
The jobless rate was at 7.1 per cent, same as the prior month when the rate hit a nine-year high outside of the pandemic years.
Analysts polled by Reuters has forecast job gains of 5,000 and the unemployment rate to edge up to 7.2 per cent, Statistics Canada said.
Canada’s employment gains this year has averaged at about 24,000 jobs per month, almost 10,000 less than seen in the previous two years, as U.S. tariffs have either forced job cuts or dissuaded employers from hiring more.
The employment increase in September was completely led by full-time work and it increased in 10 out of 16 industry groups, Statscan said.
However, a few metrics showed the impact of low hiring by companies and increasing slack, or underutilized labour force, in the economy.
Young Canadians face anxiety and burnout in a tough job market
The unemployment rate among youth or those in the age bracket of 15 to 24 years edged up to 14.7 per cent in September, the highest rate in 15 years. The youths represent around 14 per cent of the total labour force in Canada.
Also, the proportion of people working in jobs which are unrelated to their qualification as well as immigrants who were overqualified for their jobs scaled up, reflecting tough labour market conditions, the statistics agency said.
The Bank of Canada has warned that slack was building up in the economy and continued uncertainty and impact of tariffs could lead to further labour market weakness.
A silver lining, however, was in the manufacturing sector which posted its first increase in job gains since January.
This sector accounts for almost a tenth of the labour force and has been the worst hit due to U.S. tariffs this year. But September data showed this sector posted the highest jobs gains in absolute numbers at 27,800, a jump of 1.5 per cent from August.
Agriculture sector posted an increase of 6.1 per cent and jobs in the natural resources sector increased by 2.2 per cent.
The average hourly wage of permanent employees – a gauge closely tracked by the Bank of Canada to ascertain inflationary trends – grew by 3.6 per cent in September on a yearly basis to $37.87, same percentage increase as last month.