OTTAWA – Canada’s recent strong jobs performance slowed to a crawl in October, as the economy managed a meagre 1,800 new jobs, not enough to nudge the unemployment rate off 7.4 per cent.
But it was the surprisingly strong number south of the border that impressed markets and economists, with the U.S. reporting an above-consensus 171,000 additional jobs, all in the private sector. As well, employment for September and August were revised upwards.
“The big story today is the U.S. job numbers, which generally were better than expected,” said Doug Porter, deputy chief economist with BMO Capital Markets.
“We’re not pounding the ground on this one, but between the upturn in the housing sector in the U.S. and somewhat better jobs picture, there are more grounds for optimism and that will spill into Canada.”
The Canadian dollar jumped on the news and was up 0.29 to 100.61 cents US in early afternoon trading.
The muted Canadian performance was expected by economists, who calculated that following two outsized months when over 86,000 jobs were created, some payback was in order. The consensus was for a 5,000 gain, but some estimates were much higher and others predicted a decline.
Analysts reasoned with the economy known to be growing below two per cent, such month job increases were unsustainable.
In a statement sent to the media, Finance Minister Jim Flaherty took comfort in the fact there was still some life in the labour market, although he said too many Canadians still cannot find jobs.
“While this month’s numbers are modest, I’m pleased to see our economy continues to create jobs,” he said. “We have more than 820,000 net new jobs created since July, 2009, with most of those full time and in the private sector.”
Scotiabank economist Derek Holt called the report a mixed bag.
“The optimistic angle is that recent job growth has been retained against concerns that a pay-back would ensure,” he explained in a note to clients. “(But) That’s still possible over coming months.”
He added that a key discouraging factor was the drop in total hours worked by 0.3 per cent in October, which will weigh on average incomes.
Other elements of the Statistics Canada report also pointed to overall weakness.
Employment in the private sector — regarded as the most indicative of economic strength — fell by 20,300 jobs.
Those was offset by strong gains of 36,900 in the public sector while the self-employment category fell by 14,900.
The October result brings the total of jobs created in Canada over the past 12 months to 229,000, all full-time, for a gain of 1.3 per cent, slightly below the growth rate in the economy.
In testimony before House and Senate committees this week, Bank of Canada governor Mark Carney described Canada’s labour market record since the 2008-09 recession as better than most advanced countries, but still below par. He noted there are still more Canadians wanting work than jobs available and many Canadians in part-time work who desire full-time employment.
Statistics Canada said the biggest loss last month came in agriculture, which shed about 16,000 workers, while the biggest gain was in education services, which added 16,200. There was little change in the key industries of manufacturing, construction and natural resources.
Overall, the economy’s goods producing industries lost 19,300 jobs, while the services sector added 21,000.
Regionally, there were as many provinces reporting increases in employment as decreases. The biggest gain was in Quebec, which saw 20,100 jobs added, while the biggest loss came in British Columbia, which reported 10,900 fewer jobs.
There were some notable swings in provincial unemployment rates, mostly due to the distribution of the 18,000 additional Canadians who were looking for work in October, as opposed to job gains or losses.
The unemployment rate rose by more than half a point in Prince Edward Island, Nova Scotia, New Brunswick and Manitoba, while there were 0.3 percentage points drops in the rate in Quebec and B.C. to 7.7 and 6.7 per cent respectively.
Note to readers: This is a corrected story. An earlier version gave an incorrect dollar figure.
Friday, November 2, 2012