Blog /
Labour Force Survey September 2025: A broad-based jump in employment most likely to push interest rate cut to December
September’s rebound in hiring is welcome but fragile. A 60,000-job gain, led by full-time manufacturing work, suggests the labour market still has some strength left — but with unemployment stuck at 7.1% and youth joblessness the highest since 2010, it’s clear the recovery remains uneven.



Anupriya Gangopadhyay
“After two months of job losses, September added 60,000 jobs— driven entirely by full-time employment. Gain of 28,000 jobs in manufacturing industry was the standout, offering a brief tailwind to the sector.
But with the unemployment rate holding at 7.1% — its highest in four years — and youth unemployment nearing 15%, the labour market’s footing remains precarious. With inflation running below target and our BDL Nowcast model showing steady real GDP growth of about 1.7% for Q3, the Bank of Canada may take a wait-and-see approach before delivering any final rate cut later this year.”
KEY TAKEAWAYS
- Employment Levels: In September almost all the decline observed in August (-66,000) for employment level has been reversed. Employment level increased by 60,000 in September, primarily driven by full-time employment. As a result, employment rate rose by 0.1 percentage points to 60.6%.
- Unemployment and Participation Rates: Unemployment rate continues to tread at 7.1%—up by 0.5 percentage points since the beginning of 2025. However, with more people seeking employment in September, participation rate rose by 0.1 percentage point from previous month to 65.2%.
- Demographics and Job Types: Unlike the previous LFS releases where majority of the gain/loss was concentrated in part-time employment, in September 2025 release, the employment gain was entirely driven by full-time employment. Employment increased in core-aged group (25-54 years) both for men (+76,000, +1.2% m/m) and women (+33,000, +0.5%m/m). With more workers entering the retirement zone, employment rate among old workers (aged 55 years and above) was down by 0.6 percentage points to 63.5%. As for youth, they are still finding it hard to break into the labour market, with youth unemployment rate at 14.7%, highest in last 15 years excluding the Covid-19 pandemic period.
- Sectoral Breakdown: The manufacturing industry gained the most (+28,000), demonstrating the resilience and capacity of Canadian industries to withstand the blow of tariffs and trade uncertainties. The healthcare and agriculture industries added 14,000 and 13,000 jobs, respectively. Following little to no change in previous releases, the retail and wholesale trade industry saw significant employment losses (-21,000) in September 2025.
- Provincial Trends: Largest gains in employment recorded in Alberta (+43,000, +1.7% m/m), over-compensating for the cumulative losses recorded in July and August along with fall in unemployment rate by 0.6 percentage point to 7.8%. New Brunswick and Manitoba gained mildly (+4,700 and +3,900, respectively). Along with gain of 9,000 employees, Ontario also saw a surge in its unemployment rate by 0.2 percentage points to 7.9%.
TABLES



Other Blogs

Oct 07, 2025
Merchandise Trade August 2025: Tariffs, Gold Swings, and Lumber Duties Sink Canada’s Exports – Trade Gap Hits 18-Month High

Sep 29, 2025
Businesses Showing Remarkable Resilience: Key Findings from Business Insights Quarterly (Q3 2025)

Sep 26, 2025