Canada reports ample job growth for October
Statistics Canada data showed on Friday that Canada’s economy gained a net 108,300 jobs in October, entirely full-time and far ahead of analyst forecasts. The jobless rate remained at 5.2%, beating forecasts it would edge up to 5.3%.
Employment in the goods-producing sector grew by a net of 45,100 jobs, largely in construction and manufacturing. The services sector was up by a net 63,200 positions, mostly in accommodation and food services, as well as professional, scientific, and technical services.
Commentary
ROYCE MENDES, HEAD OF MACRO STRATEGY AT DESJARDINS GROUP
“The economy added a whopping 108K jobs in October versus expectations for an increase of just 10K. Gains were broad-based across industries, with manufacturing, construction, accommodation, and food services leading the way higher. All of the new jobs were full-time employment. The gains in October offset the job losses seen in the prior four months.
“Population growth surged due to immigration, which meant businesses had more opportunities to alleviate labor shortages. As a result, despite the hiring spree, the unemployment rate remained at 5.2%.
“The annual pace of wage growth accelerated to 5.5% during the month. That will lead to more concerns that wage growth is becoming an independent source of excess inflation. Up until this point, wages hadn’t looked particularly worrisome in Canada. But the more this measure heats up, the more pressure will be on the Bank of Canada to continue its rate hiking cycle for longer than it previously anticipated.”
DARCY BRIGGS, PORTFOLIO MANAGER AT FRANKLIN TEMPLETON CANADA
“It’s very surprising … it beat expectations by a factor of 10.”
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“If you dig below the details, using the 6-month moving average, the average gain is around 10,000 jobs a month. So I guess one of the big takeaways is that employment data in Canada has been notoriously volatile over the last five or six months … the moving average is increasing, although a lot slower than the headline would suggest.”
DEREK HOLT, VICE PRESIDENT OF CAPITAL MARKETS ECONOMICS AT SCOTIABANK
“It seems Bank of Canada Governor Macklem zigged when he should have zagged, judging by these numbers. They’re very strong. I’m surprised actually… It’s a very tight labor market, so to still be signaling that they can find workers against the falling trend and participation rates, I think, is a pretty strong positive… It seems to be pretty solid with strong numbers under the hood.”
The job numbers imply, “for now; it does lean more towards the 50 (bps) kind of slant” rate increase for the Bank of Canada in December.
