Unemployment rate unchanged at 6.5%
Total hours worked were up 1.6 per cent year-over-year
Canada’s unemployment rate remained steady at 6.5% in October, showing minimal job growth, as reported by Statistics Canada. The economy added 14,500 jobs last month, about half the expected amount, with the gains largely in full-time employment. Sectors such as business, building, and support services saw increases, while employment declined in finance, insurance, real estate, rental and leasing, and public administration.
Average hourly wages rose by 4.9% from a year earlier, reaching $35.76, with total hours worked increasing by 1.6% year-over-year. Notably, youth employment rose for the first time since April but was still down 2.7 percentage points compared to last year.
Despite several rounds of interest rate cuts, Canada’s labor market faces challenges due to high interest rates and inflation, dampening business investment and hiring. A growing labor force, driven by record immigration, has resulted in more job seekers but not enough job placements, leading to a drop in the employment rate to 60.6% from 61.9% a year prior.
With one more employment report expected before the Bank of Canada’s next interest rate decision, the debate on whether to reduce rates by 25 or 50 basis points remains open. CIBC economist Avery Shenfield noted the “mixed nature” of the latest data, expressing a slight preference for a 50 basis-point cut. Bank of Canada Governor Tiff Macklem has stated that further rate reductions could stimulate economic growth and employment, particularly benefiting young people and new immigrants.
