- The Canadian unemployment rate was unchanged at 5.5% in October as a net 1.8k jobs were shed. The labour force was little changed on the month.
- Dragging total employment lower was a net decline in full time employment (-16.1k), while part time employment rose modestly (+14.3k). Splitting the data differently, the public sector carried the day, adding a net 28.7k jobs, as the private sector shed 2.7k. A 27.8k decline in self-employment sent the total below zero.
- There was a near mirror split between service producers (+39k) and goods-producers (-40.9k). On the former, notable gains were seen in public administration (+20k, likely lifted by election-related activity), and finance and insurance (+17.8k). Within the goods producers, declines in manufacturing (-23.1k) and construction (-21.3k) held back the total.
- By province, Ontario (-16.2k, unemployment rate unchanged at 5.5%) and Quebec (-9.5k, unemployment rate up 0.2p.p. to 5.0%) shed the most jobs, while B.C. broke a four month contraction streak, adding 15.3k net jobs and saw its unemployment rate fall a tick to 4.7%.
- On a trend basis, the six month average pace of job creation fell to 22.4k in October, while the year-on-year pace of net hiring stood was a healthy 2.4%, comprised largely of gains in full-time employment.
- Wage gains held up nicely in October, at 4.4% y/y for permanent employees, slightly stronger than the month prior. Growth in total hours rose a touch on the month, holding the y/y pace steady at 1.3%.
Key Implications
- Can’t win them all. After a few months of strong labour market performance, October brought a decidedly ho-hum report. There were more than a few blemishes in today’s report, from another drop-off in private employment, to the fact that the already-soft headline was flattered by election-related activity, or a trend in hours worked that could charitably be called disappointing.
- This is of course a notoriously noisy series, so some perspective is needed. Employment is still up nicely on a year-year basis, and the gangbuster pace of gains early in the year was never sustainable. Strong wage gains alongside high vacancy rates are indications of labour market tightness, suggesting a more modest trend in net hiring going forward.
- The Bank of Canada indicated at its last rate decision that it would be looking for signs of the global slowdown spilling into consumer spending and housing activity here. There has certainly been a bit of a disconnect between the labour market and consumer spending of late, but with wages up strongly and trend hiring not too bad, the fundamentals for those sectors remain strong. What will matter more is if these fundamentals continue to fail to translate meaningfully into activity or if consumer spending and real estate start to move in the other direction.
