Jobless rate in Canada holds steady at 6.5%, in-line with lackluster economy
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Canada’s jobless rate was unchanged in October at 6.5 per cent and employment rose by 14,500 positions, the statistics agency said Friday.
While the job gains were below the consensus forecast of 27,000, they were mostly full-time positions in the private sector, with manufacturing seeing a healthy increase of 9,700. Total hours worked increased 0.3 per cent in October and average hourly wages climbed at 4.9 per cent year-over-year pace, up from 4.6 per cent in September.
Friday’s report probably doesn’t do much to tilt the Bank of Canada in one direction or another in terms of further interest rate cuts. The central bank has reduced borrowing costs in its past four consecutive meetings, with the latest cut last month a jumbo-sized 50 basis points.
“The October report is very much consistent with an economy that is still grinding out modest growth, and wage gains that are slightly hot for comfort,” Doug Porter, chief economist at BMO, wrote in a note. “This so-so result doesn't really turn the dial on the Bank of Canada's cut-o-meter, with the market still leaning slightly to a follow-up 50 bp reduction in December.”
Porter says policy makers may “turn a bit more cautious” on cuts, given the recent decline in the Canadian dollar and some signs of life in the housing market, as well as the continued strength in the U.S. economy.
Tempering the supportive signals in the jobs report, the employment rate—the proportion of the population aged 15 or older that is employed—dropped by 0.1 percentage points to 60.6 per cent, the sixth straight monthly decline, the agency said. The participation rate fell for a fourth consecutive month to 64.8 per cent, the lowest level outside the pandemic since 1997.
The next jobs report is scheduled for Dec. 6. The Bank of Canada makes its next interest rate announcement on Dec. 11.
