Economy added 47,000 new jobs in September, unemployment rate ticked down

In September, the economy added 47,000 jobs, and the unemployment rate dropped to 6.5 percent, marking the first decline since January, according to Statistics Canada’s report on Friday.

The agency noted that employment gains were primarily driven by youth and women aged 25 to 54, with full-time employment seeing its largest increase since May 2022. These overall job gains came after four months of little change.

Previously, the unemployment rate had been steadily rising, reaching 6.6 percent in August. That month, inflation fell to two percent, the lowest in over three years, aided by lower gas prices, bringing it in line with the Bank of Canada's inflation target.

The central bank has reduced its key interest rate three times this year and is expected to continue cutting rates as inflation eases and broader trends indicate a weakening labor market.

Employment Rate Still Low Despite Gains
Although September saw job gains, the employment rate fell, reflecting continued population growth in Canada. Statistics Canada explained that since the employment rate peaked at 62.4 percent in January and February 2023, it has been trending downward due to population growth outpacing job creation.

Year-over-year, employment was up 1.5 percent in September, while the population aged 15 and older included in the Labour Force Survey grew by 3.6 percent.

The information, culture, and recreation sectors saw a 2.6 percent employment increase between August and September, after seven months of little change, with much of the growth occurring in Quebec. Wholesale and retail trade saw its first increase since January at 0.8 percent, while professional, scientific, and technical services rose by 1.1 percent.

Average hourly wages increased by 4.6 percent year-over-year to $35.59, a slowdown compared to August’s five percent growth.

Unemployment Still Rising for Some Groups
Despite overall improvements, unemployment for some groups continues to rise. Black and South Asian Canadians aged 25 to 54 saw their unemployment rates increase year-over-year in September, significantly higher than rates for non-racialized and non-Indigenous individuals.

For Black Canadians in this age group, the unemployment rate climbed to 11 percent, while for South Asian Canadians it reached 7.3 percent. In contrast, for non-racialized, non-Indigenous individuals, the rate was 4.4 percent.