Canadian economy added 8,200 jobs in December, while unemployment rose to 6.8%

Statistics Canada says a boost in the number of people looking for work in December drove the unemployment rate higher at the end of the year.

Canada created just 8,200 new jobs in December, while the unemployment rate rose to 6.8 per cent, up from 6.5 per cent the month before.

The December results come after three months of outsized gains in employment. The economy had ​added a total of 181,000 new jobs from September through November, in contrast to almost no change in the first eight months of 2025, when U.S. tariffs and trade ⁠uncertainty choked hiring.

RBC assistant chief economist Nathan Janzen said more people entering the labour force is an "encouraging development."

While more people looking for jobs can push up the unemployment rate, the increase suggests that Canadians who were on the sidelines of the labour market might now feel more optimistic about their ability to find work.

December's job gains were concentrated in full-time work, which added 50,200 jobs in December, while part-time ‍employment fell ⁠by 42,000.

Employment in health care and social assistance in December increased by 21,000, while the professional, scientific and technical services sector posted ‍a drop of about 18,000 positions, the first decrease since August. The trade-sensitive manufacturing sector added 4,300 jobs in December.

Job gains were higher for those 55 and over, but the job market remained difficult for young Canadians, as youth unemployment for those aged 15 to 24 rose by half a percentage point to 13.3. That figure was down from 14.7 per cent recorded in September, a 15-year high outside the COVID-19 pandemic.

Average hourly wages rose 3.4 per cent year-over-year in December, cooling from 3.6 per cent in November.

Analysts polled by Reuters ahead of the release had expected a net loss of 5,000 positions and the jobless rate to edge up to 6.6 per cent.

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Statistics Canada said the labour market faced headwinds from U.S. tariffs through much of 2025, but conditions improved for job seekers toward the end of the year.

Douglas Porter, BMO's chief economist, said the December figures bring job gains back to a more "realistic place."

"Following massive swings in the prior six months (mostly on the strong side of the ledger), today's ho-hum report likely has a better grasp on reality," Porter said in a note.

He said the moderate numbers wouldn't be of much interest to the Bank of Canada when deciding on any interest rate changes, and supported his prediction that the bank will hold rates.

Friday's jobs report marks the Bank of Canada's last look at the state of the labour market before its first interest-rate decision of the year later this month. The central bank held its policy rate steady at 2.25 per cent in its final decision of the year last month.