Canada's employment growth continues for third consecutive month

Employment in Canada saw a steady increase in January, marking the third consecutive month of growth, according to the latest Labour Force Survey released by Statistics Canada. The national unemployment rate edged down to 6.6%, reflecting a 0.1 percentage point decline from December 2024.

The Canadian labour market added 76,000 jobs in January, representing a 0.4% increase in total employment. The employment rate rose slightly to 61.1%, continuing a positive trend following previous gains in December (+91,000) and November (+44,000).

Significant employment growth was observed among youth aged 15 to 24 (+31,000; +1.1%) and individuals in the core working-age group (25 to 54 years old). Among core-aged workers, employment rose for both women (+36,000; +0.5%) and men (+28,000; +0.4%).

Sector-wise, the manufacturing industry led the gains with an increase of 33,000 jobs (+1.8%), followed by professional, scientific, and technical services (+22,000; +1.1%). Additional employment increases were recorded in construction (+19,000; +1.2%), accommodation and food services (+15,000; +1.3%), and transportation and warehousing (+13,000; +1.2%).

Regional trends and wage increases

Employment growth was concentrated in Ontario (+39,000; +0.5%), British Columbia (+23,000; +0.8%), and New Brunswick (+2,900; +0.7%). Other provinces saw little change in their employment levels. Ontario’s unemployment rate remained steady at 7.6%, while British Columbia’s employment rate climbed 0.4 percentage points to 61.3%, despite an unchanged unemployment rate of 6.0%. New Brunswick’s unemployment rate saw a notable decline of 1.3 percentage points, reaching 6.4%.

Average hourly wages increased by 3.5% year-over-year, reaching $35.99. This marks the third consecutive month of slowing wage growth, following increases of 4.0% in December and 4.2% in November. Total actual hours worked increased by 0.9% in January and 2.2% on a year-over-year basis.

Unemployment declines, but challenges persist

The number of unemployed individuals remained at approximately 1.5 million in January, up 20.2% from a year earlier. Youth unemployment saw a notable decline, dropping 0.6 percentage points to 13.6%, while unemployment among core-aged men and women remained stable at 5.6%. The unemployment rate for women aged 55 and older decreased to 4.5%, while for men in the same age group, it remained at 5.5%.

Despite recent employment gains, some workers continue to face challenges finding jobs. Among unemployed individuals in December, 65.4% remained unemployed in January.

Economic conditions to impact market

Shifting economic conditions influence employees’ job-leaving intentions. As labour markets cool, workers may seek job stability, the report noted. In Canada, unemployment fell recently but remained higher in January 2025 (6.6%) than a year earlier (6.1%). The job-changing rate declined to 0.4%, below pre-pandemic levels.

Employee retention varies by occupation. In January, 6.1% of permanent employees planned to leave their job, down from 6.9% in 2024. Health workers’ intention to leave fell to 4.8%. Sales and service workers (9.0%) were most likely to leave. Among recent immigrants, 9.3% planned to leave, compared to 5.8% of Canadian-born workers.