Canada’s labour market strengthened in October 2025 as the Canada unemployment rate declined to 6.9%. This is down from 7.1% in September, marking the first decline since July. According to data from Statistics Canada, employment increased by 67,000 (+0.3%), lifting the national employment rate to 60.8%. Hiring momentum broadened across key industries, with gains concentrated among men aged 25 to 54 (+33,000) and youth aged 15 to 24 (+21,000). These figures show renewed participation among both core-age and younger workers.
Job Growth Across Key Sectors
Job growth was strongest in wholesale and retail trade (+41,000), transportation and warehousing (+30,000), information, culture and recreation (+25,000), and utilities (+7,600). Conversely, construction employment fell by 15,000 (-0.9%). Regionally, Ontario led with 55,000 new jobs, while Newfoundland and Labrador added 4,400. These gains helped offset declines in Nova Scotia (-4,400) and Manitoba (-4,000). Average hourly wages rose 3.5% year over year (+$1.27 to $37.06), following 3.3% growth in September, underscoring continued wage strength.
Impact on Bank of Canada Policy
The firmer-than-expected employment data quickly influenced market sentiment. Traders are trimming expectations for a December rate cut as they reassessed the path of Bank of Canada rate policy. With the Canada unemployment rate easing and wage growth steady, most economists now expect the central bank to hold its policy rate at the upcoming meeting. The Bank of Canada has emphasized that monetary policy remains sufficiently restrictive to guide inflation back to target. October’s results reinforce that stance. Unless the next CPI report shows a sharp slowdown in price pressures, the odds of another rate cut before year-end appear slim.
Outlook for Borrowers and Investors
For borrowers, a stable Canada unemployment rate and firm wage growth suggest mortgage and credit conditions may remain steady through the winter. Investors tracking bond yields and CORRA futures on the BoC Meeting Dashboard have similarly reduced bets on near-term easing. The overall picture points to an economy that, while slowing, remains resilient enough to keep the Bank of Canada in a cautious wait-and-see mode heading into December.
To understand the factors driving these decisions, you can explore The Six Drivers of monetary policy. Stay updated with live policy rate probabilities on the Bank of Canada Odds Dashboard or read our How It Works section to understand how changes in the Canada unemployment rate influence interest-rate expectations.
