Statistics Canada reported that an increase in job seekers during December led to a rise in the unemployment rate, reaching 6.8 percent compared to the previous month’s 6.5 percent. Canada saw a modest addition of 8,200 new jobs in December, following three consecutive months of significant employment growth. During September to November, a total of 181,000 new jobs were created, a stark contrast to the stagnant job market earlier in 2025 due to U.S. tariffs and trade uncertainties impacting hiring.
RBC’s assistant chief economist, Nathan Janzen, viewed the surge in labor force participation as a positive development. Although an influx of job seekers can elevate the unemployment rate, it indicates increased optimism among Canadians previously disengaged from the labor market.
The job gains in December were mainly in full-time positions, with a notable increase of 50,200 jobs, while part-time roles decreased by 42,000. Industries such as health care and social assistance saw a rise of 21,000 jobs, whereas professional, scientific, and technical services experienced a decline of 18,000 positions, marking the first drop since August. The manufacturing sector, sensitive to trade fluctuations, added 4,300 jobs during the month.
While older workers aged 55 and above saw more job gains, youth employment for individuals aged 15 to 24 faced challenges, with the unemployment rate rising to 13.3 percent. Average hourly wages grew by 3.4 percent year-over-year in December, slightly lower than the 3.6 percent increase in November.
Analysts had forecasted a net loss of 5,000 jobs with a slight uptick in the unemployment rate to 6.6 percent. The labor market, impacted by U.S. tariffs earlier in the year, showed signs of improvement towards the end of 2025, according to Statistics Canada. BMO’s chief economist, Douglas Porter, noted that the December job figures reflected a more stable trend after months of significant fluctuations, suggesting a realistic outlook.
Porter indicated that the modest job numbers were unlikely to influence the Bank of Canada’s decision on interest rates, supporting the expectation of rate stability. The recent jobs report serves as the central bank’s final assessment of the labor market before its upcoming interest-rate decision later this month, following the unchanged policy rate of 2.25 percent in the previous month’s decision.