Canada posts surprise jump in job gains in September, unemployment rate unchanged

OTTAWA (Reuters) -Canada's economy posted a surprise 60,400 net job gains in September, almost entirely reversing the losses of the previous month, data showed on Friday, but was not enough to bring down its multi-year high unemployment rate. The jobless rate was at 7.1%, same as the prior month when the rate hit a nine-year high outside of the pandemic years. Analysts polled by Reuters has forecast job gains of 5,000 and the unemployment rate to edge up to 7.2%, Statistics Canada said. Canada's employment gains this year has averaged at about 24,000 jobs per month, almost 10,000 less than seen in the previous two years, as U.S. tariffs have either forced job cuts or dissuaded employers from hiring more. The employment increase in September was completely led by full-time work and it increased in 10 out of 16 industry groups, StatsCan said. However, a few metrics showed the impact of low hiring by companies and increasing slack, or underutilized labor force, in the economy. The unemployment rate among youth or those in the age bracket of 15 to 24 years edged up to 14.7% in September, the highest rate in 15 years. The youths represent around 14% of the total labor force in Canada. Also, the proportion of people working in jobs which are unrelated to their qualification as well as immigrants who were over-qualified for their jobs scaled up, reflecting tough labor market conditions, the statistics agency said. The Bank of Canada has warned that slack was building up in the economy and continued uncertainty and impact of tariffs could lead to further labor market weakness.  A silver lining, however, was in the manufacturing sector which posted its first increase in job gains since January. This sector accounts for almost a tenth of the labor force and has been the worst hit due to U.S. tariffs this year. But September data showed this sector posted the highest jobs gains in absolute numbers at 27,800, a jump of 1.5% from August. Agriculture sector posted an increase of 6.1% and jobs in the natural resources sector increased by 2.2%. The average hourly wage of permanent employees – a gauge closely tracked by the Bank of Canada to ascertain inflationary trends – grew by 3.6% in September on a yearly basis to C$37.87, same percentage increase as last month. (Reporting by Promit Mukherjee; Editing by Dale Smith)

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