Statistics Canada reported that an increase in job seekers during December led to a rise in the unemployment rate at the close of the year. Canada saw the creation of 8,200 new jobs in December, causing the unemployment rate to climb to 6.8 percent from 6.5 percent in the previous month.
Following three months of substantial employment growth, with a total of 181,000 new jobs added from September to November, the economy witnessed minimal changes in job creation in the first eight months of 2025 due to uncertainties surrounding U.S. tariffs and trade.
RBC’s assistant chief economist, Nathan Janzen, expressed positivity towards more individuals entering the workforce, indicating a positive trend. The increased number of job seekers may lead to a higher unemployment rate but also suggests that Canadians who were previously inactive in the job market now have increased optimism about their job prospects.
The job gains in December were primarily in full-time positions, with an addition of 50,200 jobs, while part-time employment decreased by 42,000. Sectors such as health care and social assistance saw an increase of 21,000 jobs, while professional, scientific, and technical services experienced a decline of approximately 18,000 positions, marking the first drop since August. Additionally, the manufacturing sector, sensitive to trade, added 4,300 jobs in December.
The job market favored individuals aged 55 and over, while young Canadians faced challenges, with youth unemployment for those aged 15 to 24 rising to 13.3 percent. However, this figure was an improvement from the 15-year high of 14.7 percent recorded in September.
Average hourly wages saw a 3.4 percent year-over-year increase in December, slightly lower than the 3.6 percent growth in November. Analysts had predicted a net loss of 5,000 jobs and an uptick in the jobless rate to 6.6 percent, according to a Reuters poll conducted before the release of the data.
Statistics Canada noted that the labor market encountered obstacles from U.S. tariffs throughout much of 2025, but conditions improved for job seekers towards the year’s end. BMO’s chief economist, Douglas Porter, viewed the December figures as a return to a more realistic job growth scenario after significant fluctuations in the previous months. Porter indicated that these moderate numbers are unlikely to impact the Bank of Canada’s interest rate decisions, reinforcing the expectation of rate stability.
The recent jobs report serves as the Bank of Canada’s final assessment of the labor market before its upcoming interest rate decision later in the month. The central bank maintained its policy rate at 2.25 percent in its last decision of the year.