MNI BRIEF: Canada Sept Unemployment Falls, Wages Stay Hot

Canada's unemployment rate posted a surprise decline in September and wage gains held above 5%, underlining the tight job market that's leading the central bank to press ahead with higher interest rates.

The jobless rate fell to 5.2% from 5.4%, taking it back towards the record low 4.9% set earlier this year. The decrease was a combination of a 21,100 rise in employment and a 20,300 decline in the labor force, Statistics Canada reported Friday. The job gain mirrored the forecasts of economists, though they predicted no change in the unemployment rate.

Many investors are more focused on wage inflation and average hourly pay rose 5.2% in September from a year earlier, the fourth month exceeding a 5% pace. Wages rose in nearly all industries and workers also moved into higher-paying types of .

The Bank of Canada on Thursday said the job market remains tight, the economy is overheated and it will press ahead with the G7’s most aggressive rate hikes to pull inflation from four-decade highs back to a 2% target. 

Some of September's job gains are overstated. Educational jobs rose 46,000 to rebound from a similar decline in August, swings related to the timing of contract positions around back-to-school season. Similarly, hours worked fell 0.6% in September and are down 1.1% since June, lining up with other signs of slowing economic growth.