OTTAWA (Reuters) – Canada’s economy added a net 46,700 jobs in September, more than forecasts, while the jobless rate unexpectedly decreased for the first time in 8 months to 6.5%, data showed on Friday.
Analysts polled by Reuters had forecast a net gain of 27,000 jobs and that the unemployment rate would rise to 6.7% from 6.6% in August.
The job additions were in full-time work, which recorded its largest gain since May 2022 and more than offset a decline in part-time jobs, Statistics Canada data showed.
The healthy jobs data could assuage some concerns about growing slack in Canada’s labor market and may weaken the case for larger-than-usual rate cuts by the central bank.
The wholesale and retail trade, the information, culture and recreation and the professional, scientific and technical services sectors contributed the most to the gains.
The decline in the unemployment rate in September was driven by youth, whose unemployment rate fell by 1 percentage point to 13.5%, Statscan said.
The average hourly wage growth for permanent employees slowed to an annual rate of 4.5% from 4.9% in August. The closely-watched wage growth rate was the slowest since the 3.9% recorded in June 2023.
The Bank of Canada has flagged weakness in the labor market among main points of concern in its effort to juggle the impact of opposing forces on inflation – the persistently high cost of shelter and services, and a weakening economy and rising unemployment.
In September, immigration-fueled population growth continued to outpace jobs growth, with the proportion of the population which was employed falling 0.1 percentage points to 60.7%. The participation rate also fell to 64.9% from 65.1% in August, the third decline in four months.
The central bank has lowered its policy rate by 25 basis points at each of its last three meetings, and it is expected to cut rates once more at its next announcement on Oct. 23. Before the jobs report, money markets saw a roughly 35% chance of a larger 50 basis-point cut.
Employment in the goods sector decreased by a net 3,600 jobs, while the services sector gained a net 50,200 jobs.
(Reporting by Ismail Shakil in Ottawa; Editing by Dale Smith)
Comments