Employment blew away expectations in October, as the Canadian labour market added a meaty 108k positions in October. As such, job losses recorded over the past few months were more than recouped.
All of October’s gain was in full-time work, which jumped by 119k positions. There was little change in the number of part-time positions. Meanwhile, the private sector did the bulk of the hiring (+74k positions).
Even with the robust jobs gain, the unemployment rate held steady at 5.2%, as the labour force climbed by 110k and the participation rate edged up 0.2 ppts to 64.9%.
By industry, strong gains were recorded in construction (+24.6k positions), manufacturing (+23.8k), professional, scientific and technical services (+17.9k), accommodation and food services (+18.3k) and other services (+17.5k). In contrast, a steep decline was recorded in trade (-20.2k).
On a geographic basis, six provinces recorded gains, with the bulk of the hiring concentrated in Ontario (43k) and Quebec (28k).
Lastly, total hours worked jumped 0.7% m/m, while average hourly earnings were up 5.6% year-on-year, marking an acceleration from September’s 5.2% pace.
Key Implications
Wow. This jobs report checked all the boxes in terms of being a blowout report. Headline job growth surged, and gains were powered by full-time, private sector positions. In addition, hours worked surged, and wage growth accelerated. The unemployment rate was unchanged, but this was due to many more Canadians looking for work – a healthy sign for growth. Notably, bond yields and the dollar are up in the wake of the report.
The Canadian labour market clearly still has some steam left to it. And, the gain in hours worked suggests that economic growth got off to a good start to begin the fourth quarter, after decelerating in Q3. This report also justifies the Bank’s stance that more needs to be done on the rates front, and our current forecast anticipates an additional 50 bps of tightening by the end of the year.
