Canada's October jobs report shows third straight monthly decline
Private sector employment dropped by 53,000 while public sector roles increased, and the unemployment rate for young workers rose to 13.7 percent.
By Harvey Wilson ·
Canada's economy lost 4,700 jobs in October, marking the third consecutive month of employment declines. Statistics Canada released the figures on Friday, showing the unemployment rate climbed by two tenths of a point to 6.7 percent. The agency also reported that the number of people actively searching for work increased during the same period.
The October decline followed a cumulative loss of 110,000 jobs across August and September. Economists surveyed by Reuters had predicted the labor market would rebound with a gain of 13,600 positions. Instead, private sector employment fell by 53,000, the first drop in that segment since February. Public sector employment rose by 50,000, partially offsetting the private losses.
Sneha Puri, an economist at Indeed, called the release a disappointment for those hoping October would signal a recovery. She noted that Indeed's Canadian job postings ticked up at the end of the month, which could indicate future hiring activity. Puri warned that if this optimism does not translate into strong employment numbers in coming months, the recent weakness may signal a renewed cooling of the labor market.
Industry breakdowns showed that wholesale and retail trade led the losses, shedding 29,000 roles. Transportation and warehousing as well as food and accommodation sectors also posted declines. Construction and education saw some gains, but these were not enough to counterbalance the losses in other areas.
The labor market proved especially tough for young workers aged 15 to 24. Their unemployment rate jumped 0.7 percentage points from September to reach 13.7 percent in October. Statistics Canada stated that the rate was higher for students than for youth not attending school. The layoff rate, defined as the proportion of September employees laid off by October, remained virtually unchanged at 0.7 percent compared to a year earlier.
Average hourly wages rose 2.2 percent annually in October, down slightly from 2.3 percent in September. Andrew Grantham, a senior economist at CIBC, said he had expected more support for the labor market from one-time factors like the Alberta referendum. He noted that the data suggests underlying softness in the jobs market beyond trade-sensitive areas.
The data arrives a week after the Bank of Canada raised its policy rate by a quarter point to 2.5 percent, its first hike in over three years. Thomas Ryan of Capital Economics argued that the muted wage growth and rising unemployment suggest the bank has little room for further tightening. Financial markets priced in a 35 percent chance of another rate hike at the Bank's December 9 meeting, according to LSEG Data & Analytics.
