RBC Says Canada's Job Market Showing Signs of Stabilization Ahead of October Jobs Report

07:01 AM EST, 11/03/2025 (MT Newswires) -- Canada's job market data on Friday is expected to show further evidence of stabilization in October, said RBC.

Canada is slated to release the October Labour Force Survey (LFS) on Friday at 8:30 a.m. ET.

The bank expects employment to show a 10,000 increase in October. Monthly employment changes are "notoriously volatile."

A 60,000 jump in employment in September followed 66,000 and 41,000 declines in August and July, respectively, and an 83,000 surge in June.

However, with population -- and available labor force -- growth slowing, even modest growth in employment over time is enough to keep the unemployment rate from rising. RBC expects the unemployment rate to hold at 7.1% in October -- up 0.5% from a year ago, but just 0.1 percentage point higher than May.

Looking through monthly volatility, hiring demand has shown further signs of stabilizing, stated the bank. Job openings from indeed.com have been holding broadly steady, and layoffs have been limited. Most of the rise in the unemployment rate has come from longer job searches for new entrants. The youth unemployment rate is particularly elevated.

Heavily trade-exposed industries like manufacturing and transportation services are expected to remain under pressure, but job growth in the rest of the labour markets remains broadly positive, added RBC.

Wage growth has mostly continued to show signs of slowing, and hours worked will be watched closely as an early indicator of Q4 growth momentum, according to the bank. August gross domestic product declined unexpectedly, but an upward revision to July output and signs that the economy grew in September have left GDP tracking closely to RBC's base case forecast of 0.5% growth.

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