Canada’s labour market outperformed expectations in September, adding 47,000 jobs and seeing the unemployment rate drop for the first time since January, settling at 6.5%. The surge in job creation came after months of little change, offering a positive signal for the economy, though analysts caution there are still areas of concern.
Full-time employment recorded its largest increase since May 2022, a key factor contributing to the overall job gains. While the labour market can fluctuate month to month, the recent decline in the unemployment rate is an encouraging sign, according to economic experts.
“The unemployment rate has been trending upward for some time, so seeing a drop is a welcome development,” noted one economist. The job gains suggest the economy might be recovering after a challenging summer, with full-time employment leading the way.
However, not all the news was positive. Some analysts described the data as “mixed,” pointing to details that paint a more cautious picture. An economist highlighted that “total hours worked decreased by 0.4 per cent, and the employment rate saw a slight dip.”
Despite the improvement in unemployment, the broader trend shows that the rate has been steadily climbing over the last year and a half, reaching 6.6% in August. Inflation during that period hit a low of 2%, the lowest in more than three years, thanks in part to lower gas prices.
The Bank of Canada, having already cut its key interest rate three times this year, is expected to continue reducing rates as inflation eases and labour market conditions soften further.
