Canada's employment unexpectedly shrinks in September, jobless rate inches up
TLT•Canada shed 68,300 jobs in September, and the unemployment rate rose to 6.5% from 6.4% in August. Average hourly wages for permanent employees increased 2.3% year over year.
1. Employment declines
Canada shed a net 68,300 jobs in September, erasing all employment gains recorded earlier this year, Statistics Canada data showed. The decline followed a loss of 41,700 jobs in August; analysts had forecast a gain of 9,200 in September. Full-time and part-time losses were nearly evenly split, while manufacturing employment fell by 12,700.
2. Participation and wages
The labor force participation rate fell 0.2 percentage points to 64.8%, its lowest level in 29 years excluding the pandemic period. Statistics Canada said the decline was largely driven by an ageing population leaving the workforce and slower immigration. Average hourly wage growth for permanent employees accelerated to 2.3% year over year from 2.0% in August.
3. Rate expectations
Money markets were no longer pricing in a Bank of Canada rate increase this month, while markets expected a 25-basis-point increase in December. Desjardins macro strategy head Royce Mendes said central bankers would likely need to keep rates unchanged later this month, while higher energy prices could feed into other inflation categories this fall and force officials to tighten policy soon.
