In September, Canada’s economy added 47,000 new jobs, and the country’s unemployment rate slightly decreased.
With over twice as many jobs added as the previous month and a slight decline in unemployment, the Canadian labor market surpassed the forecasts of many economists in September.
According to Statistics Canada’s data released on Friday, the economy created 47,000 new jobs in September, and the unemployment rate fell to 6.5 percent for the first time since January.
Although job market data might fluctuate from month to month and don’t give a complete picture of the economy, a decline in the unemployment rate is nonetheless encouraging. The Bank of Canada’s inflation target was met in that month thanks to decreasing gas costs, which resulted in inflation of 2%, the lowest level in almost three years.
Decrease in Job Market Participation
Because population growth has exceeded employment growth, the employment rate has been declining since its most recent peak of 62.4% in January and February 2023, according to Statistics Canada. Employment increased 1.5% year over year in September, while the Labour Force Survey’s population of 15 and older increased 3.6%.
The beginning of the school year may have “helped nudge the jobless rate a bit lower” as kids quit the workforce, according to BMO’s Porter, who also pointed out that September may be a challenging month for jobs market statistics.
More interest rate reductions are anticipated.
The data released on Friday is the last one on the labor market before the Bank of Canada’s next interest rate decision on October 23. However, experts say that nothing in this report has changed their forecasts for more cuts.TD’s managing director and senior economist, Leslie Preston, stated that the company’s prediction remains constant at a quarter of a point. Nobody agrees. A half-percentage-point decrease in October and another in December are the bank’s projections, according to a report released by RBC assistant chief economist Nathan Janzen on Friday.
Experts warn that the property market may be impacted “soon” by immigration cuts.
Reduced immigration quotas for the next three years were revealed by the federal government on Thursday; according to some analysts, this will affect house affordability as early as next year.
On Thursday, Immigration Minister Marc Miller and Prime Minister Justin Trudeau declared that Canada will cut the number of new permanent residents by 21% by the end of the year. On a strategy to maintain its immigration goals for 2026, the federal government is changing its mind. The number of new permanent residents in Canada will drop from 500,000 to 395,000 in 2025, then to 380,000 by 2026 and 365,000 by 2027.
In a setting where population growth is slower, Kavcic predicted that condos and purpose rentals that are currently under development will go on sale in various regions the following year. According to experts, renters will see the relaxation right away, even though a number of factors, including interest rates and mortgage lending regulations, may have an impact on housing prices.
“We anticipate that the rental market will be the most affected immediately by the decrease in immigrants and non-permanent residents,” stated Randall Bartlett, senior director of Canadian economics at Desjardins.
A Desjardin assessment, however, stated that Canada needed to weigh that against its long-term labor requirements.
According to Carolyn Whitzman, senior housing researcher at the School of Cities at the University of Toronto, Canada must increase housing supply over the next three years, particularly for individuals with core housing requirements including elders, students, and newcomers.