MNI: Canada Has Best Full-Time Job Gain In More Than Two Years
Canadian employment rose by more than double market forecasts in September on the biggest gain in full-time work in more than two years, suggesting the central bank will stick with its pace of quarter-point rate cuts later this month instead of a jumbo reduction.
Net hiring climbed 46,700 according to Statistics Canada figures published Friday, compared with expectations for about 23,000 jobs. Full-time work rose by 112,000 and lower-paid part-time staffing fell by 65,300. Unemployment declined for the first time since January, down a notch to 6.5% as expected, with the decline coming after the end of a tough student summer job market.
Another sign of lingering momentum in a job market that has mostly weakened over the past year is average wages, still elevated with a 4.6% gain from a year earlier. While Bank of Canada officials have turned attention to signs its anticipated economic rebound isn't materializing and risks of an inflation undershoot, gains in worker compensation point to upside expectations in a year of high profile union strikes and lockouts.
Before the report investors were split on whether Governor Tiff Macklem would cut rates by 25 or 50 basis points at the Oct. 23 meeting especially with the Federal Reserve turning to a bigger cut. Canada's job strength appears similar to the last U.S. report that led some investors to speculate the Fed will be moving much slower now. Even Canada's private-sector hiring that was seen as lagging picked up in September.
To be sure, Canada's Labour Force Survey held signs of weakness suggesting September's hiring is hard to maintain. Hours worked, seen as a proxy for GDP, fell 0.4% on the month and was up a modest 1.4% from a year earlier. The employment rate, the proportion of the population aged 15 and older with a job, fell 0.1pp to 60.7%. That's down from 62.4% in February 2023 in a reflection of record immigration that has outpaced hiring.
Before this report unemployment climbed to the highest since 2017 excluding the pandemic. StatsCan had noted earlier that recent population growth suggests monthly job gains of around 50,000 per month are needed for the employment rate to remain constant.