Canada’s

unemployment rate

fell to 6.9 per cent in October, down 0.2 percentage points from the month before, as the economy added 67,000 jobs — mostly concentrated in part-time work.

Statistics Canada said Friday that gains were driven by job creation in wholesale and retail trade, transportation and warehousing, information, culture and recreation, and utilities. Youth unemployment (among those aged 15 to 24) also declined for the first time since February, falling 0.6 percentage points to 14.1 per cent.

Here’s what economists are saying about the latest employment data and what it means for the

Bank of Canada

’s future interest rate decisions.

‘Surprise boost’: Capital Economics

The rise in employment in October was “far stronger than we or the consensus had expected and follows a similarly strong September that also far exceeded consensus expectations,” Alexandra Brown, North America economist at Capital Economics Ltd., said in a note.

Brown noted the gains were “entirely driven by the private sector” and industries “most exposed to trade,” including wholesale and retail trade, transportation and warehousing, and manufacturing.

“This provides some reassurance that activity in those sectors is beginning to bounce back, presumably in part because the average tariff rate on Canada’s exports to the U.S. is still relatively low at about five per cent,” she said.

Brown also said the job gains in information, culture and recreation may be linked to “both the unseasonably warm weather and

Blue Jays’

run toward the World Series.”

Hours worked edged down 0.2 per cent in October, which Brown said “largely reflected labour disputes” including the teachers’ strike in Alberta. While employment growth was driven by part-time work, Brown said “we would not make too much of it” because it reversed an “unusually large” gain of 106,000 full-time positions in September.

“The surprise boost to employment and fall in the unemployment rate in October reinforces the Bank of Canada’s view that it should now sit on the sidelines and await more clarity on the impact of tariffs on the economy and inflation,” said Brown.

Resilience, but not strength: TD Economics

While “solid back-to-back job growth” over the past two months is proving Canada’s labour market is more “resilient to trade tensions” than expected, October’s data is “not a home run,” Leslie Preston, managing director and senior economist at TD Economics, said in a note.

Preston said even though labour force growth has “slowed sharply” this year, it is still outpacing job creation; she noted the unemployment rate is still higher from the 6.6 per cent level recorded in January.

“Zooming out, we see that the 

labour market

has still softened through 2025 along a number of dimensions,” said Preston. “Even with tighter immigration policy reducing labour force gains, the unemployment rate has risen, and wage pressures have cooled relative to a year ago.”

Preston said the latest data will make the Bank of Canada “more comfortable to sit on the sidelines” and let the rate cuts from its latest easing cycle “work their way through the economy.”

“The Bank expects reduced inflation pressures from a weak domestic economy to weigh against inflation pressures from

U.S. tariffs

and restructuring global supply chains,” said Preston.

While gains in September and October offset losses in July and August, Preston said “overall job market conditions remain soft.”

“While this report shows some resilience in Canada’s labour market, it is not strength,” she said.

‘Volatile survey’: Scotiabank Economics

“Canada heaped on jobs of fairly low quality, drove the unemployment rate down and recorded supercharged wage growth and a temporary drop in hours worked,” Derek Holt, vice-president and head of capital markets economics at Bank of Nova Scotia, said in a note.

Holt said those factors “vindicate” the Bank of Canada’s “clear hold signal” on its easing cycle and Prime Minister Mark Carney’s administration’s “resistance against heaping on cyclical stimulus” — at least for now.

“While it’s a spin of the wheel for a volatile survey, we can’t dismiss two months of strong gains with any greater statistical confidence than we could dismiss the brief summertime soft path as mere statistical noise,” said Holt.

He said it was “not a great quality signal” that an 85,000 increase in part-time jobs drove overall gains while the number of full-time positions dropped by 19,000. He also noted that the industries driving job gains tend not to have “relatively high paying jobs” and rely more on part-time workers compared with other sectors.

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Wage growth “super-accelerated” 9.6 per cent month-over-month on a seasonally adjusted and annualized basis, which Holt noted was the “strongest gain” since June 2022.

“Continue to expect strong … wage growth as the one-third of Canada’s workforce that is governed by expiring collective bargaining agreements continues to reset wage growth higher to make up for what they negotiated about four years ago on average. Wage settlements data is unfortunately lagging again to July,” said Holt.

• Email: jswitzer@postmedia.com