The Canadian labour market added 31k positions in October, slightly below the median consensus call for a gain of 42k jobs. This took employment 0.2% above its pre-pandemic (February 2020) level. Full-time (+36k) employment advanced, while part-time (-5k) employment dropped in October.
The labour force declined in October, decreasing by 25k. As a result of this and the increase in employment, the unemployment rate fell 0.2 ppts to 6.7% in October.
By industry, the services sector (+38k) saw all of the increase in employment. Within the sector, there were strong gains in retail trade (+72k), other services (+21k), and information, culture and recreation (+15k). This was partly offset by losses in accommodation and food services (-27k), business building and other support services (-23k) and professional, scientific and technical services (-22k).
Goods producing employment edged lower in October (-6.2k). Employment saw almost zero growth in the construction industry (+4k) as building activity continued to cool. Meanwhile, the manufacturing sector saw an 8k decline in employment.
By province, employment rose notably in Ontario (+37k) and New Brunswick (+3k), while there were decreases in Saskatchewan (-7k) and Manitoba (-3k).
Lastly, total hours worked were up 1.0% in October, which left hours 0.6% below its pre-pandemic level.
Key Implications
The Canadian labour market continued to climb in October, albeit at a slower pace than what we saw in September. Robust demand conditions fueled strong hiring activity during the month, especially in industries that benefitted from less stringent public health restrictions such as retail trade, and information, culture and recreation services. Surprisingly, employment in accommodation and food services declined for the second straight month despite having an elevated number of vacancies. It appears renewed restrictions in Alberta was partly responsible for the decline.
Looking ahead, with COVID cases on the decline, and some provinces continuing to ease restrictions (i.e. Ontario), employment should continue to advance, driven by industries with strong labour demand. That said, supply shortages that are hindering production in goods-producing industries, could hinder hiring activity in this area of the economy.
Canada’s labour market picture is likely to be impacted by the expiry of fiscal support programs. The Canada Recovery Benefit as well as wage and rent subsidies for businesses ended on October 23. We will be watching the November employment report closely for evidence of how this may have impacted labor force engagement.
