Canadian employment rises in October for second consecutive month
Canadian employment rose unexpectedly in October, marking the first back-to-back months of job creation this year and raising expectations the labour market was beginning to gather momentum after a prolonged period of instability.
Overall employment in Canada increased 43,100 in October, following a gain of 74,100 a month earlier, Statistics Canada reported today in Ottawa. A median estimate of economists forecast employment levels to decrease 5,000.
The jobless rate declined for a second consecutive month, falling 0.3 percentage points to 6.5 percent. That was the lowest reading since November 2008.
The participation rate, which measures the percentage of the workforce employed or actively searching for work, was unchanged at 66 percent.
Compared to October 2013, overall employment increased 1 percent or 182,000 with growth in September and October accounting for two-thirds of the increase. Part-time work increased 101,000 over year-ago levels, representing a gain of 3 percent. Full-time work increased 81,000 or 0.6 percent over the same period. The number of hours worked increased 0.4 percent over year-ago levels, official data showed.
On an industry level, employment increased in retail and wholesale trade, financial services, real estate, manufacturing and the education sector. Employment levels decreased in public administration, natural resources and “other services.”
Private sector employment increased last month, while the number of public sector workers decreased.
The retail and wholesale trade industry boosted employment by 39,000 last month. The financial services sector added 36,000 workers. Manufacturing employment edged up 33,000 and educational institutions added 22,000 employees, official data showed.
On a regional level, employment increased in Ontario, Manitoba and Nova Scotia. Ontario witnessed the biggest increase, as employers there added 37,000 workers. That helped push down the unemployment rate 0.6 percentage points to 6.5 percent, a fresh six-year low.
The 25 to 54 demographic was responsible for all of the job gains last month, with women accounting for most of the growth in this age group. Youth employment – the 15 to 24 demographic – was little changed in October. However, youth unemployment plunged 0.9 percentage points to 12.6 percent as more youths dropped out of the labour market.
September and October marked the first back-to-back months of job growth this year, signaling that Canada’s labour market was stabilizing following a perfect pattern of adding and destroying jobs on a monthly basis.
Today’s report, while encouraging, probably isn’t enough to curb the Bank of Canada’s outlook on the economy. The BOC believes there is ample slack in the labour market, enough to warrant accommodative policies for an extended period. Policymakers expect the economy, including the labour market, to operate below capacity for the next two years.
BOC Governor Mark Poloz has warned that declining oil prices could weigh on Canada’s growth trajectory next year. A further drop in the price of crude oil could shave a quarter percentage point off Canadian growth. In Poloz’s view, the economy needs to grow by at least 2 percent annually to close the output gap, which refers to the difference between GDP and potential GDP.
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