The Canadian labour market experienced a dynamic September 2025, with notable shifts in payroll employment, a continued rise in average weekly earnings, and an unexpected uptick in job vacancies. According to the latest data from Statistics Canada, the month presented a mixed bag of economic indicators, revealing both areas of contraction and growth across various sectors and regions.
After a couple of months of increases, overall payroll employment saw a dip, while the number of available jobs also moved in a new direction. This detailed look at the labour landscape offers crucial insights into Canada’s economic health as we head into the final quarter of the year.
## Payroll Employment Takes a Step Back
September 2025 witnessed a decrease in payroll employment, with approximately 58,000 fewer people receiving pay and benefits, marking a 0.3% decline. This fall somewhat offset the cumulative growth observed in July and August. On a year-over-year basis, payroll employment remained relatively stable.
Several key sectors were hit with employment reductions:
* **Educational Services:** A significant decrease of 19,100 employees (-1.3%), largely reversing gains from the previous two months.
* **Manufacturing:** Continued a downward trend with a reduction of 9,600 employees (-0.6%), contributing to a cumulative decline since January 2025.
* **Professional, Scientific and Technical Services:** Fell for the second consecutive month, shedding 6,400 positions (-0.5%).
* **Real Estate and Rental and Leasing:** Saw a notable decline of 5,400 employees (-1.8%), the largest monthly drop for the sector since May 2021.
However, not all sectors faced contractions. Health care and social assistance managed to add 6,500 jobs (+0.3%), and the arts, entertainment, and recreation sector also saw an increase of 1,900 employees (+0.6%).
## Average Weekly Earnings Continue to Climb
Canadians saw their average weekly earnings rise in September, increasing by 3.1% year-over-year to reach $1,317. This follows a 2.7% increase in August, indicating a sustained upward trend in compensation. Month-over-month, earnings grew by 0.7%. This growth is influenced by a combination of factors, including changes in wages, the composition of the workforce, and hours worked.
Across the provinces, there was variation in these increases:
* Nova Scotia experienced the highest year-over-year growth at 5.5%.
* Prince Edward Island also saw strong growth at 4.8%.
* Alberta and British Columbia recorded more modest increases of 1.6% and 1.8% respectively.
* Nunavut had the smallest increase at 0.5%.
## Job Vacancies Show First Increase Since January
In a notable shift, job vacancies across Canada increased to 486,000 in September, a rise of 25,500 (+5.5%). This marks the first month-to-month increase in job vacancies since January 2024, suggesting a potential turn in hiring demand. Despite this monthly increase, the total number of vacancies remained 9.3% lower compared to September 2024.
The national job vacancy rate climbed slightly to 2.7% from 2.6% in August. Furthermore, the unemployment-to-job vacancy ratio improved, falling to 3.3 unemployed persons for every job vacancy, down from 3.5 in August. This signals a tighter labour market, albeit still with more job seekers than available positions.
Sectors with increased job vacancies included:
* **Construction:** (+5,100; +14.9%)
* **Manufacturing:** (+3,400; +10.8%)
* **Information and Cultural Industries:** (+1,500; +24.8%)
Conversely, several sectors saw year-over-year declines in vacancies, most notably health care and social assistance (-16,200) and transportation and warehousing (-5,700).
Provincially, Ontario (+11,200) and Newfoundland and Labrador (+900) recorded the largest increases in job vacancies. In contrast, Alberta, British Columbia, Saskatchewan, and Manitoba all experienced decreases in their job vacancy rates year-over-year.
## Wrapping Up Canada’s Labour Picture
September 2025 painted a nuanced picture of the Canadian labour market. While payroll employment experienced a slight contraction, primarily driven by declines in sectors like education and manufacturing, average weekly earnings continued their upward trajectory. The increase in job vacancies, the first in many months, signals a potential revitalization in demand for workers, despite being lower than the previous year. These trends suggest a labour market undergoing adjustment, with a focus on specific sector performance and provincial variations shaping the overall economic narrative.
### Key Takeaways
* Canadian payroll employment decreased by 0.3% in September, with notable drops in educational services and manufacturing.
* Average weekly earnings rose 3.1% year-over-year to $1,317, demonstrating continued wage growth.
* Job vacancies increased by 5.5% month-over-month, the first rise since January 2024, bringing the total to 486,000.
* The unemployment-to-job vacancy ratio improved to 3.3, indicating a slightly tighter job market.
* Ontario and Newfoundland and Labrador saw increases in job vacancies, while several Western provinces experienced a decrease in their vacancy rates year-over-year.
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