By Erik Hertzberg
(Bloomberg) — The Canadian economy added more jobs than expected but the unemployment rate held steady as more people entered the workforce.
Employment rose by 60,400 positions in September, driven by increases in full-time work. The jobless rate was unchanged at 7.1%, Statistics Canada data showed Friday. The job gains surpassed even the most optimistic projection in a Bloomberg survey of economists — the median forecast was for 5,000 jobs to be created.
The manufacturing sector added 27,800 employees, and agriculture, health care and other services all added workers. The employment rate — the proportion of the working-age population that’s employed — rose 0.1 percentage points to 60.6% in September.
The surprisingly strong job gains suggest Canada’s job market is showing some resilience to tariff disputes with the U.S. The jump in factory employment, while not driven by autos, shows the sector may be benefiting from some exporters being exempt from levies through the U.S.-Mexico-Canada Agreement.
The loonie surged to the day’s high against the U.S. dollar after the release of Canada’s September jobs data, gaining some 0.3% to $1.3980 as of 8:35 a.m. in Ottawa. Canadian debt fell at the front-end of the curve, with the two-year yield rising about two basis points to 2.49%.
The report also reduced expectations for a rate cut at the Bank of Canada’s next decision on Oct. 29, with traders putting the odds at about 25% compared with roughly a coin flip previously.
Still, the better-than-expected gains only partially offset the major job losses in July and August. Canada’s economy has shed a net 45,900 jobs over the last three months, the weakest quarter since the pandemic.
Total hours worked fell 0.2% in September. The labour force rose by 72,300.
Policy-makers cut the policy rate to 2.5% at their September meeting, but the jobs data will add to evidence that labor market slack may not be building as rapidly as was previously believed. Officials have faded elevated core inflation measures, which are around 3%, but the federal government will deliver a budget on Nov. 4, which is expected to be expansionary.
“A robust month doesn’t necessarily mean a new trend,” Charles St-Arnaud, chief economist at Alberta Central, said in an email. He pointed to the June report, in which 83,000 jobs were added, followed by two months of decline.
“With economic activity expected to remain tepid in the coming months, we continue to believe that the Bank of Canada will need to ease before the end of the year.”
The headline gain needs to be viewed in the context of what preceded it, said Andrew Grantham, economist at Canadian Imperial Bank of Commerce. Even after Friday’s data, the three and six-month averages remained soft, he said.
“Overall, today’s data still suggests that a large degree of slack remains within the labour market, which we think justifies a further interest rate cut from the Bank of Canada, although today’s strength in employment could delay the timing of that move
Policymakers may wait until December before they decide to cut interest rates again, Bradley Saunders, North America economist at Capital Economics, said in a report to investors.
The private sector added 21,900 jobs last month, and public-sector employment rose 30,700. Regionally, the province of Alberta led the gains with 42,500 jobs added, with Ontario adding the second-most positions with 8,800.
Yearly wage growth for permanent employees held steady at 3.6%, matching economist expectations.
–With assistance from Mario Baker Ramirez and Carter Johnson.
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Last modified: October 10, 2025