Canada’s job market bounced back slightly in October as the national unemployment rate fell for the first time in three months.
Statistics Canada reported Friday that the unemployment rate fell to 6.9 per cent in October, and 67,000 net new jobs were added to the labour market.
October’s unemployment rate fell 0.2 per cent from 7.1 per cent in September, and matched the 6.9 per cent reading for July.
This was also the second straight month with more jobs added to the labour market than were lost amid the ongoing trade war, and the impacts of U.S. tariffs on Canada’s economy.
While jobs were added in September, the overall unemployment rate remained flat at the same 7.1 per cent seen in August.
Some economists see this as good news overall, but still remain cautious given the uncertainty of the trade war and how tariff policies may evolve.
“A surprising bounce. The Labour Force Survey continued its wild ride of late, coming in on the upside of a second straight month after losses over the summer. Employment rose faster than population growth,” said Brendan Bernard, senior economist at Indeed.
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“As year end approaches, it’ll be tough to expect more from the labour market beyond muddling through, without more material improvement in the broader economy. But for now, still low layoff rates are keeping the situation stable, as we wait for the economic situation to shift.”
Statistics Canada says most of the employment was for men aged 25 to 54 years old, with 33,000 jobs added, and youth aged 15 to 24 adding 21,000 positions.
Youth unemployment in October was measured at 14.1 per cent, which was a drop of 0.6 per cent from September’s reading of 14.7 per cent.
This also marked the first decline in the youth unemployment rate since February after reaching a 15-year high in September (excluding 2020 and 2021 Covid-19 pandemic years).
Despite the decline, the data shows unemployment for younger Canadians remains more than double the national average.
A report by Desjardins released in September described Canada’s youth unemployment levels being consistent with that of a recession.
“I worry that we’re heading towards a crisis where we risk losing a generation of very talented workers who have skills, and who want to start contributing to Canadian society and exercising their knowledge and those skills,” says Vass Bednar, managing director of the Canadian Shield Institute for Public Policy.
“Is it really that we’re hearing from employers that young people don’t have the skill sets that they’re looking for? Or are we hearing from employers that they are just not looking for young people?”
Prime Minister Mark Carney’s budget aims to tackle youth unemployment with nearly $1.6 billion in new funding for various government bodies over the next three years to support over 175,000 new jobs for younger Canadians.
In October, Statistics Canada reports wholesale and retail trade led the job gains with 41,000 new jobs, followed by 30,000 positions added in transportation and warehousing, 25,000 in information, culture and recreation and 7,600 in utilities.
Most of the jobs added were in the private sector, led by an additional 85,000 part-time roles, while full-time positions shrank by 19,000, according to the report, which was concerning to at least one economist.
“The overall gain in jobs was mostly driven by three sectors: retail/wholesale, transportation and storage, and info/culture/rec. These tend not to be relatively high-paying jobs and they tend to lean on part-time workers relative to some other sectors,” says Derek Holt, vice president and head of Capital Markets Economics at Scotiabank.
“Enter the fact that part-time jobs drove the overall report with a gain of 85,000 while full-time jobs fell by 19,000. That too is not a great quality signal.”
Meanwhile, employment declined the most in construction with 15,000 jobs lost in October.
The agency also points out from January to October 2025, employment in goods-producing industries, which includes manufacturing and construction, fell by a net 54,000 jobs, or 1.3 per cent.
Goods-producing industries including lumber are one of the most-impacted by U.S. tariffs, in addition to that of steel, aluminum, auto and energy products.
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