MNI: Canada Job Growth Slows, Unemployment Holds Steady
Canadian employment growth slowed and lagged economist forecasts in October, though it was enough to keep the jobless rate steady and workers continued to receive wage increases far above the pace of consumer price inflation.
Hiring slowed to 14,500 on the month from 46,700 in September and fell short of the economist consensus for 25,000. The overall increase was split between a gain of 25,600 full-time jobs and a decline in part-time of 11,200. Job creation has been flat over five of the last six months.
Unemployment held at 6.5% as the size of the labor force grew at about the same pace as job creation. The jobless rate remains 0.8 percentage point higher than a year earlier and economists predict it could trend higher unless the government makes good on a pledge to curb record immigration. Slack in the labor market hasn't pulled down average wage gains, which quickened to 4.9% in October from a year ago from the previous 4.6% pace.
Bank of Canada Governor Tiff Macklem quickened the pace of rate cuts to 50bps last month and said further reductions can be justified with inflation back on target and the need for a period of above-potential growth to keep the economy in balance. Officials see the main risks to the outlook centered on how consumers respond to the loosening cycle after a painful-three year fight to bring down inflation.
Investors are split on whether the Bank makes another jumbo cut or returns to the three quarter-point cuts earlier this year, and Friday's report from Statistics Canada is hardly the last word. There is another job report and other GDP figures before then, and a government due to bring in a fall fiscal update.
There were two notable signs of slack in the job market, as both the participation rate and the employment rate slipped to the lowest since the late 1990s. Hours worked, a proxy for GDP growth, was also modest at 0.3% on the month and 1.6% compared with 12 months earlier. On a year-over-year basis, employment was up by 303,000 or 1.5%.