The Canadian economy pleasantly surprised analysts by adding 67,000 jobs in October, resulting in a decline in the unemployment rate to 6.9%, as reported by Statistics Canada on Friday. CIBC senior economist Andrew Grantham noted that while most of the job gains were in part-time roles, the overall strong figure was not diminished.
Both full-time and part-time employment saw an increase year-over-year, with the wholesale and retail trade sector leading the job growth by adding 41,000 positions. Sectors such as transportation, warehousing, information, culture, recreation, and utilities also contributed to the rise in employment. However, the construction industry experienced a decline of 15,000 jobs. Statistics show that goods-producing industries like construction and manufacturing saw job decreases from January to October, while service-producing sectors added 142,000 jobs during the same period.
In October, private sector employment saw a rise of 73,000 jobs, while the number of public sector employees remained unchanged.
The unemployment rate decreased from 7.1% to 6.9%, with nearly one in five unemployed individuals in September finding employment in October. This decrease, as noted by BMO chief economist Douglas Porter, is one of the most significant drops in the number of unemployed individuals recorded, excluding pandemic-related changes. The youth unemployment rate also declined for the first time since February, with individuals aged 15 to 24 seeing job gains.
Despite the positive trends, economists like Andrew Hencic from TD Bank expressed caution, stating that the unemployment rate, although improved, remains elevated. Hencic highlighted that employment gains were concentrated in specific industries, indicating a lack of broad-based hiring and contributing to the persistently high jobless rate.
Factors such as a teachers’ strike in Alberta and the impact of the Toronto Blue Jays’ World Series run influenced the October data. Notably, average hourly wages increased by 3.5% to $37.06 per hour compared to the previous year.
Grantham suggested that the current data aligns with the Bank of Canada’s stance on interest rates, forecasting no further cuts. Porter indicated that with the jobless rate falling below 7% and wages remaining stable, it is likely that the Bank of Canada will pause any rate adjustments in December. Hencic also agreed, stating that the recent economic indicators are unlikely to prompt immediate action from the central bank.
