Expectations for a December fee pause strengthened Friday after stronger-than-expected employment knowledge confirmed continued resilience in Canada’s labour market. Statistics Canada reported a 67,000-job enhance in October because the unemployment fee edged down two share factors to six.9%.
“With the jobless fee dipping again beneath 7% and wages staying agency, it seems that the BoC will certainly pause in December,” wrote BMO’s Douglas Porter.
TD’s Leslie Preston agreed, saying the newest knowledge give the central financial institution room to “let the 275 foundation factors of fee cuts on this cycle work their manner via the economic system.”
With Canada’s job market “defying gravity” in October, Michael Davenport of Oxford Economics went a step additional, saying that the Financial institution of Canada is probably going executed slicing rates of interest. “At this time’s stronger-than-expected job report reinforces that view,” he wrote.
Bond markets appeared to share the view that fee cuts are no less than paused in the meanwhile, with the 5-year Authorities of Canada yield climbing to 2.68% from 2.62% earlier within the day.
Labour market exhibits resilience, although broader financial softness persists
Whereas October’s job features are encouraging, Canada’s underlying financial softness stays a priority. CIBC’s Benjamin Tal lately described the nation as being in a “per-capita recession,” noting that commerce tensions with the USA have contributed to an “irregular” financial interval.
Preston doesn’t mince phrases: “Whereas this report exhibits some resilience in Canada’s labour market, it’s not power. General job market circumstances stay comfortable.”
Echoing that view, Oxford Economics’ Davenport mentioned, “Regardless of stronger-than-expected job features in every of the final two months, slack persists within the labour market, and the longer-term pattern in hiring stays subdued. We don’t suppose job progress shall be sustained at this tempo going ahead.”
The three- and six-month averages for employment progress are holding round 20,000, which is “not spectacular, however strong sufficient,” says CIBC’s Andrew Grantham. The unemployment fee stays larger than it was initially of 2025 and is up 0.3 share factors from a 12 months earlier.
U.S. commerce coverage stays a “vital danger”
RBC economist Nathan Janzen mentioned industries most uncovered to U.S. commerce coverage, together with manufacturing and transportation, stay underneath strain regardless of some current enchancment.
He cautioned that U.S. tariff coverage “stays a big danger,” and that Canada’s labour market remains to be weaker than a 12 months in the past, with the unemployment fee up 0.3 share factors from final October.
Wanting on the broader image, Canada’s labour market is displaying indicators of restoration, however the true take a look at will come within the months forward, says Grantham.
“The approaching months will probably be a more true take a look at of simply how rapidly the labour market is recovering, as robust features in September and October largely simply offset the shocking weak spot seen within the prior two months,” he famous. “We anticipate that employment features will decelerate once more however, with inhabitants progress additionally decelerating, the unemployment fee ought to proceed a gradual transfer decrease throughout 2026.”
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Final modified: November 7, 2025
