Canada’s Unemployment Rate Remains Steady, but Job Gains Disappoint
Canada’s employment data has been a mixed bag in recent months, with some sectors showing signs of growth while others remain stagnant. The latest numbers from Statistics Canada show that the unemployment rate remained unchanged at 6.5 per cent in October, despite the economy adding only 15,000 jobs – about half of the expected 27,000.
The Unemployment Rate Holds Steady
While some economists had predicted a decline in the unemployment rate, the latest data suggests that it remains a stubborn problem for policymakers. The rate has been hovering around this level since August, with no clear signs of improvement.
Job Gains Weaker than Expected
The job gains in October were significantly lower than expected, and many analysts are attributing this to a slowdown in hiring demand. Employment in the private sector and public sector remained unchanged, while the finance, insurance, and real estate industries saw declines.
Hiring Demand Slows Down
According to Statistics Canada, there were 193,000 more people looking for jobs or temporarily laid off in October compared to the same time last year. This represents a significant increase in labour market slack.
Youth Unemployment Rate Declines
One bright spot in the data is the decline in youth unemployment rate, which fell to 12.8 per cent in October – down from its recent peak of 14.5 per cent in August. The youth employment rate rose to 54.4 per cent, marking its first increase since April.
Wage Growth Accelerates
On a more positive note, wage growth accelerated in October, with average hourly wages increasing on a year-over-year basis by 4.9 per cent – following a 4.6 per cent gain in September.
Impact on Interest Rates
The Bank of Canada’s next policy meeting is scheduled for December, and many economists are divided on whether the central bank will cut interest rates further. Some analysts believe that the mixed data could leave the Bank of Canada wondering about whether to make a cut of 25 or 50 basis points at its next policy rate decision.
Experts Weigh In
According to Douglas Porter, chief economist at the Bank of Montreal: "This so-so result doesn’t really turn the dial on the Bank of Canada’s cut-o-meter, with the market still