Canada added 47,000 new jobs in September, pushing its unemployment rate down for the first time since the start of the year to 6.5 per cent, the government statistical agency said Friday.
The acceleration in job creation, following months of little change, beat analyst forecasts.
The gains were entirely full-time and in the private sector, but total hours worked fell again in the month and wage growth cooled.
“A move down in Canada’s unemployment rate is good news”, TD Bank senior economist Leslie Preston said in a research note.
“However, September’s jobs report does not change the picture of a labor market that has cooled notably since the Bank of Canada started raising interest rates”.
The central bank had aggressively hiked rates starting in March 2022 in order to tame soaring inflation, but recently changed course as inflation slowed.
Analysts continued on Friday to forecast a cut in its key lending rate at its next meeting on 23 October, following three back-to-back reductions since June to 4.25 per cent, but predictions differed in their amount.
“A healthy increase in jobs won’t change our call that central bankers will cut rates by 50 basis points later this month”, said Desjardin’s Royce Mendes.
Others, including Preston, suggested another 25 basis point cut, in line with those from June to September, is more likely.
According to Statistics Canada, employment rose in September in several sectors: information, culture and recreation; wholesale and retail trade; and professional, scientific and technical services.
The number of private sector employees increased for the second consecutive month, while public sector employment fell.
The month also saw the largest gain in full-time employment since May 2022. That was partially offset by a decline in part-time work.
Average hourly wages increased 4.6 per cent, while total hours worked decreased 0.4 per cent in September.
