MNI:Canada Red Hot Job Mkt Returns On 108K Jobs Vs 5K Forecast

Canada's labor market smashed expectations with 108,300 new jobs in October while wage gains were about the fastest since 1997, bucking signs the economy is teetering on the edge of recession and adding to pressure for another out-sized rate increase.

Higher-paying full-time jobs grew by 119,300 and part-time work declined by 11,000 according to a Statistics Canada report Friday. Economists predicted only 5,000 new jobs.

Canada’s population is about one-ninth the size of the U.S., suggesting the current job gain is on par with an American payrolls change of about 950,000. 

While Canada's unemployment rate held at 5.2% as the labor force climbed by 110,100, that's better than the forecast 5.3% and stays near the record low 4.9% set earlier this year. 

Hourly wages climbed 5.6% from a year ago, the fifth straight month above 5%. It's the biggest gain in data back to 1997 excluding the early re-opening following Covid. Economists were looking for wage gains of about 5.1%. 

Hours worked also rebounded with a 0.7% monthly gain, a measure that some economists see as a proxy for GDP. Many private analysts, the Bank of Canada and the government say a recession next year is something of a coin toss as interest rates rise and the global economy stumbles. 

Job gains were broad-based in October including gains of almost 25,000 in both construction and manufacturing, and almost 20,000 in professional services and hospitality. Private-sector employment rose for the first time since March. 

One troubling note was a finding that 35% of working-age Canadians said they live in a household struggling to meet basic financial needs, up from 20% who said the same two years ago. Inflation at 6.9% is likely a leading cause, and the Bank of Canada raised interrates 50bps last month and signaled more is needed to restore its 2% target.