Statistics Canada reported that an increase in job seekers in December led to a rise in the unemployment rate by the year’s end. Canada saw the creation of 8,200 new jobs in December, resulting in a rise in the unemployment rate to 6.8 percent from 6.5 percent in the previous month.
Following three months of significant employment growth, with 181,000 new jobs added from September to November, there was little change in job numbers during the first eight months of 2025 due to trade uncertainties and U.S. tariffs. RBC’s assistant chief economist, Nathan Janzen, highlighted the positive trend of more individuals entering the workforce.
The increase in the number of job seekers can impact the unemployment rate, but it also signifies a growing optimism among Canadians who were previously inactive in the job market. December’s job gains were primarily in full-time employment, with a rise of 50,200 jobs, while part-time positions decreased by 42,000.
Key sectors that saw changes in employment included health care and social assistance, which added 21,000 jobs, while the professional, scientific, and technical services sector experienced a decline of approximately 18,000 positions, the first drop since August. The manufacturing sector, sensitive to trade dynamics, added 4,300 jobs in December.
Although job gains were more favorable for individuals aged 55 and above, the youth job market remained challenging, with youth unemployment for those between 15 and 24 years old increasing to 13.3 percent. Average hourly wages saw a 3.4 percent year-over-year increase in December, slightly lower than the 3.6 percent in November.
Analysts had anticipated a net loss of 5,000 jobs with a slight increase in the unemployment rate to 6.6 percent. Despite facing challenges from U.S. tariffs earlier in the year, the labor market conditions improved towards the end of 2025, according to Statistics Canada.
BMO’s chief economist, Douglas Porter, stated that the December figures bring job gains to a more realistic level, following significant fluctuations in the previous months. He noted that these moderate numbers are unlikely to influence any interest rate changes by the Bank of Canada, supporting his view that the bank will maintain its current rates.
The recent jobs report serves as the Bank of Canada’s final assessment of the labor market before its upcoming interest-rate decision later this month, after maintaining the policy rate at 2.25 percent in its last decision of the previous year.