Canada’s September jobs report landed like a pleasant surprise: 47,000 new positions, a dip in unemployment to 6.5 per cent, and a jolt of full-time, private-sector hiring after months of gloom. At first glance, that looks like the labour market has found its footing just as the Bank of Canada weighs its next rate move. But a closer look makes me cautious about declaring victory.
Yes, youth hiring was impressive 33,000 jobs for workers aged 15 to 24 and wage growth is still running at 4.6 per cent year-over-year. But participation fell, especially among younger Canadians. When fewer people are even looking for work, a lower unemployment rate can flatter to deceive. Hours worked slipped too, and job openings are trending down. That’s not a recipe for sustained strength.
Markets quickly dialed back bets on a bold half-point cut in the Bank of Canada’s policy rate this month, settling on the safer bet of a quarter-point trim. I understand the instinct: a stronger jobs print makes an aggressive cut harder to justify. Yet I’m not convinced this single report changes the bigger story of a cooling economy.
Inflation is already at the Bank’s 2 per cent target, and risks are tilting toward undershooting it. If underlying demand keeps softening, waiting for several “proof-of-strength” reports before cutting more decisively could backfire. A few upbeat numbers shouldn’t obscure the fact that hiring demand has weakened and many Canadians, especially newcomers and young people, still face a tough market.
One good month doesn’t erase a year of softening trends. The Bank of Canada may well opt for another cautious quarter-point cut on Oct. 23, but I’d argue it still has room indeed, a responsibility to stay ahead of the slowdown. The September jobs surprise is welcome, but it’s not the all-clear signal the headlines might suggest.
