Canada added jobs in October at a stronger-than-expected pace amid a slowing economic backdrop, with full-time employment surging and wage gains accelerating for a second straight month.
The unemployment rate rose from a postcrisis low, but that was due to more young people searching for work.
This new batch of Canadian jobs data might offer some comfort to the Bank of Canada, which contends that slack remains in the labor market due to tepid wage gains and other factors.
The Canadian economy added a net 35,300 jobs in October on a seasonally adjusted basis, Statistics Canada said Friday. The consensus call among traders was for a 15,000-job advance, according to economists at Royal Bank of Canada.
October's advance marked the 11th straight month of job gains, which is the longest streak in over a decade. All of the net new jobs added in October were in the private sector and of the full-time variety, which tend to offer higher pay and steady benefits compared with part-time work.
The jobless rate rose to 6.3% in October from 6.2% in the previous month. Markets had expected the unemployment rate to remain unchanged. The uptick in the unemployment rate was attributed to more people -- 56,800 -- joining the labor force to look for a job. The data agency said 18,000 more youths, aged 15 to 24, were employed in October, with all of the growth in full-time work.
On a year-over-year basis, Canadian employment increased 308,100, or 1.7%, with all of the new jobs created over the past 12 months in full-time positions.
Full-time employment in October increased by a robust 88,700 positions, following a 112,000-gain in the previous month -- or the strongest two-month gain in this category in over four decades. Part-time employment fell 53,400 in October.
The Canadian employment report "points to continued gradual tightening in the labor market and supports our call for a more hawkish stance by the Bank of Canada and another [rate] hike in January," said strategists at TD Securities in a note to clients.
At the same time Friday, the U.S. released its October employment report, which indicated nonfarm payrolls rose by a seasonally adjusted 261,000. The U.S. unemployment rate, calculated by a survey of households, fell to 4.1%, its lowest level since December 2000. When using U.S. Labor Department methodology, Canada's jobless rate in October was 5.2%.
The robust employment report comes as growth slows in Canada after a stellar 12-month run that positioned Canada as the top-performing economy among the Group of Seven. The country's gross domestic product unexpectedly shrank in August on a month-over-month basis, and the Bank of Canada expects annualized growth in the third quarter to come in below 2% after a 4.5% surge in the second quarter.
October's strong jobs data "suggest there is still some life left in the economic upswing," BMO Capital Markets chief economist Doug Porter said.
In its rate decision and quarterly forecast released last week, Canada's central bank said modest wage gains and a below-average level of hours worked suggest there is still "some excess capacity" in the labor market. It added a recent decline in the jobless rate to a postcrisis low "likely overstates the degree of improvement" in the jobs market.
On the wage front, average hourly pay rose 2.4% in October from a year ago, following a 2.2% advance in September. This marked the first time in a year and a half that average hourly wages rose 2% or more on an annual basis for two consecutive months.
Nearly all of the net new hiring was done at firms and organizations, as their payrolls rose 34,500, while the ranks of the self-employed -- who tend to be independent contractors that aren't necessarily paid on a regular schedule -- edged slightly upward.
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(END) Dow Jones Newswires
November 03, 2017 10:10 ET (14:10 GMT)