Canada: Hefty October Job Gains Masked Losses in Full-Time Employment

Canadian payrolls grew again in October, following a strong advance in September. These cumulative gains more than offset the back‑to‑back job losses in the summer and has pushed total employment in Canada to a new all‑time high. Trade‑impacted sectors led the move higher, with wholesale and retail trade, transportation and warehousing, and manufacturing all posting positive prints in the month. Most provinces have experienced employment growth in 2025, with Ontario’s (55k) strong job gains in October putting it back into the black following declines earlier in the year. However, October’s hiring spree was driven by part‑time work (85.1k), masking a decline of 18.5k full‑time positions.

Helping to pull down the headline jobless rate, the unemployment rate fell for core‑aged workers (ages 25 to 54 years) to 5.8% in October from 6.0% (graph 1). The 20.6k new jobs for youth (ages 15 to 24) was welcome news, while their unemployment rate fell by 0.6 percentage points to 14.1% following September’s 15‑year high outside of the pandemic. Nevertheless, it remains more than a percentage point higher than a year ago (our recent report External link. looked at the drivers of high youth unemployment). Looking to the provinces, the unemployment rate in Quebec was the lowest in the country in October, at 5.3%.

Despite today’s good news in the labour market, long‑term unemployment remains elevated, with nearly 1 in 4 core‑aged job searchers experiencing at least 6 months of unemployment (graph 2). The number of people unemployed as a result of permanent layoffs continued to rise, albeit remaining below recessionary levels. But even having a job doesn’t guarantee protection against financial struggles. Statistics Canada reported that 26% of fully employed households found it difficult to afford necessities such as food and housing.

Average wage growth rose slightly from September at 3.5% year‑over‑year, albeit well down from the elevated levels of over 5% that characterized the post‑pandemic period. Wage gains should continue to outpace inflation, supporting ongoing real earnings growth.

The job market is showing further signs of resilience despite the economic uncertainty. This reinforces our view that Canada should be able to experience positive, albeit weak, GDP growth in quarters ahead. This, combined with fiscal stimulus, lessens the need for further monetary stimulus. We expect the Bank of Canada to keep rates on hold for the foreseeable future.