Canada’s job market rebounds in September but challenges persist

Published 10/10/2025, 15:28
© Reuters.

Investing.com -- Canada’s labor market staged a modest comeback in September, with employment rising by 60,000, offsetting part of the losses from the prior two months. The employment rate edged up to 60.6%, though unemployment remained unchanged at 7.1%, amid higher labor force participation.

Gains in September were driven by full-time positions, which rose by 106,000 (+0.6%), even as part-time employment declined by 46,000 (-1.2%). Public sector hiring contributed the most, adding 31,000 jobs, while employment in the private sector and self-employment showed smaller increases.

Demographically, core-aged workers (25 to 54 years) were the key beneficiaries, led by a 76,000 (+1.2%) increase in employment among women and 33,000 (+0.5%) among men. Conversely, employment declined by 44,000 (-1.0%) for workers aged 55 and over, while youth employment remained flat.

Provincially, Alberta posted the largest job growth, gaining 43,000 jobs (+1.7%) and seeing its unemployment rate fall to 7.8%. New Brunswick and Manitoba also experienced job gains, although rising labor force participation in both provinces pushed unemployment rates slightly higher.

By industry, employment surged in manufacturing (+28,000; +1.5%), particularly in Ontario and Alberta, marking the sector’s first monthly increase since January. Health care and social assistance (+14,000; +0.5%) and agriculture (+13,000; +6.1%) also posted gains, while wholesale and retail trade lost 21,000 positions (-0.7%).

Wage growth remained steady, with average hourly pay rising 3.3% year-over-year to $36.78, slightly above the 3.2% pace in August. Despite the nominal gains, the employment rate remains 0.5 percentage points below its January-February 2025 peak, indicating a still-recovering labor market.

Meanwhile, structural issues persisted as skills mismatches continued to rise. In September, 16.4% of core-aged workers with postsecondary education held jobs unrelated to their field of study, up nearly a full percentage point from last year.

Recent immigrants remain particularly affected by job misalignment, with 21.2% working outside their area of training and 34.7% reporting overqualification, up 4.2 percentage points from a year earlier, underscoring the ongoing challenges in integrating skilled labor into relevant sectors.

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