Canada’s labour market showed fresh resilience in October as employers added 66,600 jobs, defying expectations of a slowdown and lowering the national unemployment rate to 6.9%, according to new figures from Statistics Canada released on Friday.
The surprise jump marks the second straight month of strong hiring, following September’s gain of 60,400 jobs, and comes at a time when global trade tensions and tariff disputes have weighed on Canada’s economic outlook.
Economists had expected the opposite: a loss of 5,000 jobs and an unchanged unemployment rate of 7.1%, according to a Bloomberg survey.
Currency and Markets React
The better-than-expected data immediately boosted market confidence. The Canadian dollar strengthened by 0.3%, reaching its strongest level of the day at C$1.4070 against the U.S. dollar. Government bonds slipped in response, with the two-year yield rising four basis points to 2.43% as investors factored in the possibility of a firmer labour market influencing monetary policy decisions.
Job Growth Driven by Service Industries
Growth in October was powered primarily by part-time roles, with gains notably recorded in:
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Wholesale and retail trade
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Transportation and warehousing
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Information, culture and recreation
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Utilities
The only sector that saw a significant decline was construction, reflecting broader caution in the housing market and infrastructure spending.
Ontario Leads National Hiring
Ontario was the epicentre of the hiring boom, accounting for 55,000 of the new jobs, the province’s first employment increase since June.
Youths — a group that has faced persistent employment challenges this year — also benefited. Their unemployment rate fell 0.6 percentage points to 14.1%, the first improvement since February.
Other key labour indicators improved as well:
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Participation rate ticked up to 65.3%
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Employment rate rose to 60.8%
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Wage growth for permanent workers climbed to 4%, surpassing forecasts of 3.5%
Central Bank Likely to Take Notice
The strong labour performance arrives just weeks after the Bank of Canada cut its policy rate to 2.25%, the second consecutive reduction. Governor Tiff Macklem recently suggested rates are near an appropriate level as the economy works through what he has described as a “structural transition.”
While the Bank of Canada previously downplayed September’s job surge, another month of solid hiring may influence its view of how much support the economy still needs.
Hours Worked Show Signs of Pressure
Despite headline gains, total hours worked dipped 0.2% in October, partly due to ongoing labour disputes, though hours remain up 0.7% year-over-year — a sign that economic momentum is not yet consistent across sectors.
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