09:20 AM EDT, 10/29/2025 (MT Newswires) -- Toronto's unemployment rate has jumped nearly 3.5 percentage points from its post-pandemic lows, to nearly 9%, said TD.

That has far outstripped increases recorded in the rest of Ontario and left the region with the fourth-highest unemployment rate among Canada's major urban areas, wrote the bank in a note to clients.

Up until recently, rising joblessness in Toronto was largely a function of sizzling labor force gains, pointed out TD. However, in 2025, a sharp slowdown in hiring momentum has been a more pronounced driver, reflecting idiosyncratic factors, a weak homebuilding industry and the trade war with the United States.

The widening gap between Toronto's unemployment rate and the rest of Ontario's has been particularly pronounced among young workers, stated the bank. At present, a concerning one-in-five youths in Toronto's labor market are unemployed.

Several reasons could explain this, including a weak economic backdrop that's forcing older workers to take part-time jobs in industries that traditionally skew younger in their hiring practices, added TD.

With labor force growth cooling more sharply in Toronto, the gap between it and Ontario's unemployment rate could narrow through next year, although it may remain above average, according to the bank. That said, unemployment rates in both jurisdictions are likely to move lower than their 2025 level.