Jobless rate drops to 6.5% in September. What that means for rate cut hopes

globalnews.ca:

The Canadian economy added some 47,000 jobs in September, enough to lower the unemployment rate for the first time since the start of 2024.

Statistics Canada said Friday that job gains were focused in full-time work and in the private sector, offset by losses in part-time roles and public employment.

That drove the jobless rate down a tick to 6.5 per cent, which StatCan said was the first decline since January. The unemployment rate was 6.6 per cent in August, then a seven-year high outside the pandemic years.

The information, culture and recreation sector, the wholesale retail and trade segment and the professional, scientific and technical services industries all contributed more than 20,000 job gains in September.

StatCan noted that job gains in youth helped to reverse what had been a weakening trend in the labour market for that youngest demographic of workers. Youth aged 15 to 24 added 33,000 jobs last month, driving the age group’s unemployment rate down a full percentage point to 13.5 per cent.

A particularly tough job market for youth and newcomers to Canada has been cited as a major factor driving the unemployment rate higher over recent months.

The participation rate — those working or actively looking for work — also declined 0.2 percentage points in September. StatCan said the youth participation rate in particular has been trending down since February 2023, and tends to decline in periods of high unemployment as younger people spend longer in school or otherwise delay entry into the labour force.

The average hourly wage in Canada rose 4.6 per cent year-over-year last month, easing from annual gains of 5.0 per cent in August.

With inflation back at the Bank of Canada’s two per cent target as of August, the