By Nojoud Al Mallees
(Bloomberg) — The Canadian economy added 66,600 jobs in October, marking a second consecutive month of surprise employment gains as tariffs otherwise slow down economic activity.
The employment increase helped bring down the jobless rate to 6.9%, Statistics Canada’s labour force survey showed on Friday.
Economists surveyed by Bloomberg were expecting the unemployment rate to hold steady at 7.1%, and for the economy to shed a modest 5,000 jobs.
The Canadian labour market also surprised to the upside in September, adding a healthy 60,400 jobs.
Taken together, the last two months have reversed some of the softness in the labour market this year brought on by the US trade war. Since January, Canada has added a net 164,500 jobs.
The three-month rolling average for employment gains was 20,500.
The loonie surged to the day’s high against the US dollar after the release and rose some 0.3% to C$1.4070 as of 8:35 a.m. in Ottawa. Canadian debt fell across the curve and trailed major peers, with the two-year yield rising about four basis points to 2.43%.
While Bank of Canada Governor Tiff Macklem downplayed the significance of the September job report, two consecutive months of strong employment gains will likely catch the central bank’s eye.
Last month, the bank lowered its key interest rate by 25 basis points for second time in a row, bringing it to 2.25%. But Macklem signalled that the policy rate is now at “about the right level” and the central bank may not be able to help the economy adjust to tariffs any further.
The Bank of Canada’s monetary policy report projected the economy would remain weak through 2027, a period that Macklem called a “structural transition.”
Job gains in October were driven by part-time work. The employment increase was led by wholesale and retail trade, transportation and warehousing, information, culture and recreation as well as utilities. Meanwhile, the largest job loss last month was recorded in construction.
The increase in employment was concentrated in Ontario, where employment rose by 55,000, marking the first increase since June.
The unemployment rate among youth, who have particularly struggled to find jobs in recent months, fell by 0.6 percentage points to 14.1%, declining for the first since February.
The participation rate rose slightly to 65.3% in October.
The employment rate, which reflects the proportion of the working-age population that’s employed, rose as well to 60.8%.
Annual wage growth for permanent employees rose to 4%, compared to economist expectations for a deceleration to 3.5%.
Total hours worked fell by 0.2% in October due to labour disputes and were up 0.7% compared to a year ago.
–With assistance from Curtis Heinzl and Carter Johnson.
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Last modified: November 7, 2025