Canada Employment Surges, While Underlying
Numbers Suggest Further Easing Ahead
Labour market continues to defy odds. Canada’s economy added 64,000 jobs in September, well above the consensus estimate of 20,000. This brought year-to-date employment to 388,000, a 60 per cent increase when compared to the first three quarters of last year. September’s job gains were entirely driven by a 66,000 position increase in the highly volatile educational services industry. However, labour market conditions continued to ease beneath the surface. Jobs outside the education sector fell slightly, hours worked contracted 0.2 per cent monthly, 75 per cent of all new jobs were part time, and month-over-month earnings growth slowed to 0.2 per cent. These factors suggest that elevated borrowing costs and improving labour supply are continuing to be absorbed by the broader economy. Despite these elevated job gains, the unemployment rate held constant at 5.5 per cent for the third consecutive month as the labour force continued to grow amid record immigration. This surge in hiring activity increases the odds of a further interest rate hike.