Canadian employers added 60,000 jobs in September, a modest rebound after shedding 106,000 positions over the previous two months, according to Statistics Canada’s Labour Force Survey released Oct. 10. The unemployment rate held steady at 7.1 per cent.
The September gains were concentrated in full-time positions, which rose by 106,000, while part-time employment fell by 46,000. The employment rate increased slightly to 60.6 per cent but remains below the 61.1 per cent peak recorded in January and February.
Despite the overall job growth, the labour market shows signs of strain for younger workers and skills mismatches for educated employees.
Core-aged workers drive September gains
Employment among workers aged 25 to 54 increased significantly in September, with women gaining 76,000 positions and men adding 33,000. The employment rate for core-aged women rebounded to 80.4 per cent, while the rate for core-aged men reached 86.1 per cent.
Workers aged 55 and older saw employment decline by 44,000 in September, pushing their employment rate down to 33.6 per cent. Youth employment aged 15 to 24 showed little change.
Youth unemployment reaches highest level since 2010
The youth unemployment rate climbed to 14.7 per cent in September, the highest rate since September 2010 outside of the pandemic years. The increase over the past 12 months was driven primarily by students, whose unemployment rate reached 17.1 per cent, up 3.1 percentage points from September 2024.
Students faced a difficult summer job market in 2025. The unemployment rate for returning students averaged 17.9 per cent from May to August, the highest since summer 2009 excluding the pandemic.
Youth not attending school had an unemployment rate of 11.9 per cent in September, virtually unchanged from a year earlier.
Manufacturing and health care add workers
Manufacturing added 28,000 jobs in September, the first increase since January, with gains concentrated in Ontario and Alberta. Health care and social assistance added 14,000 positions, bringing year-over-year growth in the sector to 53,000 jobs.
Agriculture employment rose by 13,000, while wholesale and retail trade shed 21,000 positions.
Alberta leads provincial employment growth
Alberta recorded the largest provincial employment gain with 43,000 new jobs, offsetting declines from July and August. The province’s unemployment rate fell to 7.8 per cent.
New Brunswick added 4,700 positions and Manitoba gained 3,900 jobs. Ontario’s unemployment rate rose to 7.9 per cent despite little change in employment, as more people entered the job market.
Wage growth remains modest
Average hourly wages for employees increased 3.3 per cent year-over-year to $36.78 in September, following growth of 3.2 per cent in August.
Skills mismatch increases for educated workers
New data from the survey reveals growing challenges in matching workers to appropriate roles. In September, 16.4 per cent of core-aged workers with postsecondary credentials worked in jobs unrelated to their education or training, up from 15.5 per cent a year earlier.
The mismatch was more pronounced among workers aged 25 to 34, where 18.2 per cent reported working outside their field, an increase of 1.6 percentage points from September 2024.
Recent immigrants faced significantly higher rates of skills mismatch. Among core-aged workers who landed in Canada within the previous five years, 21.2 per cent worked in jobs unrelated to their education, compared with 15.2 per cent of Canadian-born workers.
Overqualification rises among recent immigrants
More than one in five core-aged workers with postsecondary education reported being overqualified for their current role in September. Among recent immigrants, the overqualification rate reached 34.7 per cent, up 4.2 percentage points from a year earlier.
Recent immigrants who reported overqualification were concentrated in sales and service occupations at 29.8 per cent and business, finance and administration roles at 17.6 per cent.
Canadian-born workers who worked outside their field were more than three times as likely as recent immigrants to say they had chosen to work in a different type of job, rather than being unable to find work in their field.
