Canadian employment rose in September for a 10th straight month and workers' wages increased at their fastest pace in over 17 months, in a sign the country's labor market remains resilient even as indicators point to stalling economic growth.
The country's jobless rate remained unchanged from the previous month, sitting at a postcrisis low.
Continue Reading Below
The Canadian economy added a net 10,000 jobs in September on a seasonally-adjusted basis, Statistics Canada said Friday, as an outsize gain in full-time employment was offset by a steep decline in part-time work. September's increase was just below the consensus call for a 12,000 advance, according to economists at Royal Bank of Canada.
On a year-over-year basis, Canadian employment increased 319,700, or 1.8%, with nearly all of the new jobs created over the past 12 months of the full-time variety, which tend to offer higher pay and steady benefits.
The unemployment rate in September stood at 6.2%, matching market expectations and a low last reached in October, 2008. When using U.S. Labor Department methodology, Canada's jobless rate in September was 5.1%.
"Make no mistake, this is a strong report despite the somewhat subpar headline job gain," said Doug Porter, chief economist at BMO Capital Markets, citing the rebound in wage growth and strong surge in full-time employment.
At the same time Friday, the U.S. released its September employment report, which indicated a 33,000 decline in nonfarm payrolls, the first decrease in employment in seven years. The U.S. unemployment rate, calculated by a survey of households, fell two-tenths of a percentage point to 4.2%, a level not seen since early 2001.
Arguably the most important element in Canada's September employment report is the reading on average hourly wages. Workers' wages in September rose 2.2% from a year ago, the data agency said, which marks the biggest 12-month advance in average hourly pay since April of last year. As it happens, the last time wages rose 2% or more on an annual basis was April, 2016.
In August, average hourly wages climbed 1.8% from a year ago.
In a speech last week, Bank of Canada Gov. Stephen Poloz said wage growth was one of four metrics the central bank would be monitoring closely to judge how the economy is evolving. He said wage growth, which rose at annualized 1.7% pace in the second quarter, has "been slower than would be expected" for an economy like Canada's that is approaching full capacity. He reckoned the slow growth in wages could be attributed to a shift in employment composition, as people who lost high-paying jobs amid the commodity-price swoon moved to lower-paying work elsewhere.
"How long this effect will continue is not clear, and other phenomena may be at work," said Mr. Poloz, who used the speech to signal there the central bank would be working from a clean slate in crafting future rate decisions after rate increases in July and September.
Strategists at TD Securities said the fast pickup in wage growth is likely to garner close attention at the Bank of Canada. The data, the firm added, "supports further removal of monetary stimulus sooner rather than later."
Traders' expectations for another rate increase at the Bank of Canada's Oct. 25 decision have dimmed significantly, amid data suggested the economy has stalled. Economic output in July was unchanged from the previous month, and exports have dropped for three straight months after hitting a record level in May.
The September jobs report indicated full-time employment rose 112,000 while part-time jobs fell 102,000. This largely reversed the previous month's result, which showed a large drop in full-time work but a significant gain in part-time jobs.
Employment at firms and organizations rose by nearly 11,000 in September, while the ranks of the self-employed -- who tend to be independent contractors that aren't necessarily paid on a regular schedule -- edged slightly downward. Public-sector employment increased 26,000 in September, spurred by a 20,000 gain in the educational sector. Meanwhile, the private sector shed 15,500 jobs in the month.
Write to Paul Vieira at email@example.com
(END) Dow Jones Newswires
October 06, 2017 10:12 ET (14:12 GMT)