Canada’s economy added 47,000 new jobs in September, unemployment rate

The Canadian labour market exceeded many economists’ expectations in September, adding more than twice as many jobs as the previous month while unemployment ticked lower — but digging deeper into the numbers shows employment remains a concern, analysts say.

Statistics Canada reported on Friday that the economy added 47,000 jobs in September, while the unemployment rate declined for the first time since January to 6.5 per cent.

Full-time employment also saw its largest gain since May 2022. The overall job gains followed four consecutive months of little change, the agency said.

Job market numbers can be volatile month to month and don’t provide a full picture of the economy, but it’s still positive to see the unemployment rate tick down, BMO chief economist Doug Porter told CBC News.

“The unemployment rate in the past year or so has been on a one-way street higher,” Porter said. “The fact that the unemployment rate is down a bit is encouraging.”

The jobs increase suggests the economy might be picking up a little after a “pretty tough summer,” he said, with full-time employment soaring.

But many analysts pointed out that the overall market news was “mixed,” with Katherine Judge, an economist at CIBC, stating in a note that “the headline masked some weaker details.”

“Total hours worked decreased by 0.4 [per cent], while the employment rate fell by a tick.”

Looking at the broader trend, the unemployment rate has been steadily climbing over the past year and a half, hitting 6.6 per cent in August.

Inflation that month was two per cent, the lowest level in more than three years, as lower gas prices helped it hit the Bank of Canada’s inflation target.

The central bank has cut its key interest rate three times this year and is widely expected to keep cutting, as inflation has subsided and the broader trend points to a weakening in the labour market.

Participation in job market down

Despite the job gains in September, which were driven by youth and women aged 25 to 54, the employment rate was lower in the month, reflecting continued growth in Canada’s population.

Statistics Canada said since the employment rate saw its most recent peak at 62.4 per cent in January and February 2023, it’s been following a downward trend, as population growth has outpaced employment growth. On a year-over-year basis, employment was up by 1.5 per cent in September, while the population aged 15 and older in the Labour Force Survey grew 3.6 per cent.

But the participation rate — which is the percentage of the working-age population that either has a job or is looking for one — dropped in September, the third decline in four months and a continuation of a downward trend seen since late 2023.