Data Flashes

The Bottom Line:

Canada’s labour market conditions loosened again in October and slack persists, with employment edging lower (a third consecutive decline) and the unemployment rate rising 0.2 percentage points to 6.7%.

Weakness was concentrated in the 15 to 24 year cohort, where the unemployment rate rose sharply to 13.7%, driven by both lower employment and rising labour force participation. The unemployment rate for prime-age (24-54) workers was unchanged in comparison, steady at 5.6%. 

In October, overall employment was effectively little changed from September (-4,700) with gains in public sector employment (+50,000) offset by losses in private jobs (-53,000). The growth in public sector jobs was the first in five months, and only partially retraces earlier cumulative loss of 148,000. 

New U.S. tariffs implemented since August 22 have not, and are not expected to lead to widespread layoffs in Canada. They are severe but of a narrow scope. Manufacturing jobs changed little in August and September. Sectors disproportionately affected by U.S. tariffs including auto and steel manufacturers can continue to look to increasing government support to transition out of a period of reduced U.S. demand. 

Looking ahead, we continue to expect there will be progress in Canada’s labour market recovery, notwithstanding softer readings in recent months.

Domestic spending has held up well into the fall and job postings on Indeed.com rose significantly in October, led by an increase in mining and oil and gas postings that could potentially be tied to increased global demand for Canadian energy export as Middle East supply remains disrupted. 

Our forecast expects the unemployment rate in Canada to keep edging lower, to below 6% in the second half of  2027. 

The details:

Employment

• Total: −4.7k (−0.02%) m/m; +16.5k (+0.08%) y/y.

• Full-time: −18.1k (−0.10%) m/m, +39.0k (+0.23%) y/y.

• Part-time: +13.4k (+0.35%) m/m, −22.5k (−0.58%) y/y.

• Self-employed: −1.8k m/m, +51.5k (+1.92%) y/y.

• Men: −19.9k m/m, −55.2k y/y. Women: +4.9k m/m, +63.4k y/y.

Public vs. private

• Public sector: +49.6k (+1.12%) m/m, but −69.7k (−1.53%) y/y.

• Private sector: −52.5k (−0.38%) m/m, +34.8k (+0.25%) y/y.

Industry

• Goods-producing: +20.6k. Services-producing: −25.3k.

• Gains: construction +15.6k, educational services +15.0k, health care and social assistance +14.1k, agriculture +4.8k, manufacturing +3.8k.

• Declines: wholesale and retail trade −28.8k, transportation and warehousing −10.1k, professional, scientific and technical −4.8k, finance, insurance and real estate −3.5k, utilities −2.6k.

Unemployment and participation

• Unemployment rate: 6.7% (+0.2 pt m/m, −0.2 pt y/y).

• Participation: 64.8% (0.0 m/m, −0.4 pt y/y).

• Youth (15–24): unemployment 13.7% (+0.7 pt m/m, −0.3 pt y/y); participation 62.6% (+0.3 pt m/m).

• Core-age (25–54): unemployment 5.6% (unchanged m/m, −0.2 pt y/y); participation 88.5% (unchanged).

Provinces

• Provinces, rising m/m: Alberta 7.3% (+0.9), Saskatchewan 5.9% (+0.5), Ontario 7.3% (+0.3), PEI 7.4% (+0.1).

• Provinces, falling m/m: Newfoundland and Labrador 8.7% (−0.4), Quebec 5.7% (−0.3), Nova Scotia 6.2% (−0.1), British Columbia 6.3% (−0.1).

• Provinces, unchanged m/m: New Brunswick 7.4% and Manitoba 5.0%.

R8 unemployment rate

• R8 is 8.98% (+0.12 pt m/m, −0.12 pt y/y).

• The gap to the official rate is about 2.3 points, not significantly different from recent months, so there is no sign of a notable rise in discouraged workers.

Hours and wages

• Hours worked: +0.34% m/m, +0.55% y/y.

• Average hourly wage, all employees: +0.66% m/m, +2.24% y/y down from 2.34% in September.

• Permanent employees: +0.62% m/m, +2.04% y/y.

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About the author:

Claire Fan is a Senior Economist at RBC. She focuses on macroeconomic analysis and is responsible for projecting key indicators including GDP, employment and inflation for Canada and the US.

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