Canada's pace of jobs gains slows in October, jobless rate edges lower

·2 min read
View of a wood flooring sales office and an employment agency in Toronto

By Julie Gordon and David Ljunggren

OTTAWA (Reuters) -Canada's run of monthly blockbuster job gains ended in October, as the economy added fewer jobs than expected, though the jobless rate hit a 20-month low and hours worked edged closer to their pre-pandemic levels, data showed on Friday.

The Canadian economy added a net 31,200 jobs in October, below analyst expectations of 50,000, while the unemployment rate fell to 6.7%, slightly ahead of a consensus estimate of 6.8% and its lowest point since February 2020, Statistics Canada data showed.

Strong gains for private-sector employees were offset by a sharp decline in the self-employed.

"It's interesting to see that you have nearly 70,000 jobs added in the private sector and you have a little bit of an offset coming from self-employment," said Jimmy Jean, chief economist at Desjardins Group.

The participation rate dipped slightly to 65.3%, as fewer youth searched for work, Statscan said. It said the decline was consistent with pre-pandemic monthly variations. Employment returned to pre-pandemic levels in September, and that remained true in October.

Prime Minister Justin Trudeau's government last month ended broad-based COVID-19 support programs after employment rebounded. With inflation well above target and the labor market rebounding, the Bank of Canada signaled last month it could start hiking rates three months sooner than previously expected.

"I don't think this significantly changes the timing of expected rate hikes by the bank," said Doug Porter, chief economist at BMO Capital Markets.

The October employment gains all came in the full-time sector, which added 36,400 jobs. The part-time sector lost 5,200 positions. Total hours worked climbed 1.0%, coming within 0.6% of February 2020 levels.

"Today's data for hours worked shows that slack continues to be absorbed even outside of the headline employment/unemployment figures," said Andrew Grantham, senior economist at CIBC Capital Markets.

The Canadian dollar was trading nearly unchanged at 1.2456 to the greenback, or 80.28 U.S. cents.

(Reporting by David Ljunggren and Julie Gordon in Ottawa, additional reporting by Steve Scherer in Ottawa and Fergal Smith in TorontoEditing by Raissa Kasolowsky, Kirsten Donovan and Andrea Ricci)

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