Canada added 64,000 new jobs in September, maintaining an unemployment rate of 5.5% for the third consecutive month, according to a report by Statistics Canada. While this job growth exceeded analyst expectations, some economists believe it is insufficient to prompt the Bank of Canada to resume its tightening cycle.
Key points from the report include:
- The gain in jobs was not evenly distributed, with the education sector experiencing a substantial increase of 66,000 jobs, offsetting declines in other sectors.
- Gains were also seen in transportation and warehousing, while employment in finance, insurance, real estate, rental and leasing, and construction sectors decreased.
- Analysts had expected a job gain of 20,000, with the unemployment rate inching up to 5.6% from 5.5% in August.
- Average hourly wages in September increased by 5% year-on-year, following a 4.9% rise in August.
Economists have expressed varying opinions on the implications of this job growth for the Bank of Canada’s monetary policy. While the strong job market and wage growth suggest economic resilience, concerns about the uneven distribution of job gains may temper the central bank’s rate decisions. Some believe it is unlikely to prompt immediate tightening, but it will maintain the Bank of Canada’s cautious stance on interest rates. Money markets have increased their bets on a rate hike later this month following the release of these job figures. The report highlights the role of Canada’s strong population growth in supporting the labor market, with the country experiencing the highest rate of population growth since 1957. The employment rate increased to 62% in September, with Statistics Canada noting that the pace of job creation would need to reach 50,000 jobs per month to maintain the employment rate due to the rapid population growth.