Canada recorded a tenth straight month of job gains as 10k net positions were added in September. The unemployment rate was unchanged at 6.2%.
Beneath the relatively modest headline were favourable details, as 112k net full time positions were added, while 102k part time jobs were lost on net – a reversal of August’s outturn. The public sector led hiring on net, up 26.2k positions as the private sector shed a net 15.5k postions. Accordingly, the overall gain in employment was the result of employees, with self-employment down a tick on the month.
Goods-producing industries led the gain, adding 10.5k positions, with notable strength in construction (+7.4k). The services side of the economy was flat on the month, as healthy gains in educational services (+20k) and trade (+16.6k) were offset by drops in information services (-23.7k) and health care (-10.4k). Other service industries recorded mixed performances.
Looking across the country, Ontario led the way for a third straight month, notching up 34.7k net new positions on a fairly broad-based industry mix. It was a more modest story across the rest of the country, with declines recorded in Alberta (-7.8k), Quebec (-7.6k) and B.C. (-6.7k).
Wages and hours worked were encouraging. The headline hourly wage rate accelerated further, to 2.2% year-on-year, while hours worked rose 2.4% year-on-year, with the favourable full-time/part-time split helping generate a 0.6% month-on-month increase.
Key Implications
Is there any stopping the Canadian labour market? While the details have often been mixed, Canada has now turned in ten straight months of job gains, and, in a welcome change, the details of September’s report were generally encouraging. While hiring was concentrated in the public sector, you have to go back to 2006 to find a month with stronger full-time job gains, and the unemployment rate remained at a post-crisis low.
Perhaps most welcome in this report is evidence that wages and hours worked appear to be leaving this past spring’s weakness behind them. While 2.2% wage growth may not be as robust as Canadians are used to, it is also a far cry from the 0.8% growth averaged during the second quarter.
As always, it must be remembered that this is a very noisy series, and so we shouldn’t dwell too much on one month, but the trend this year has been very encouraging as the unemployment rate has dropped 0.7 percentage points, and roughly 250k full-time positions have been added on net.
The Bank of Canada will likely be encouraged again by this report, particularly the recovery in wages, but will weigh its implications alongside other, softer data, such as this week’s disappointing trade report. On balance, additional tightening remains likely this year, but the Bank of Canada may not feel the same pressure to move quickly, as evidenced by the more dovish tone of recent communication.
