- Canadian employment in October 2013 rose a modest 13,200 although this was slightly above both market expectations of an 11,000 gain and September’s increase of 11,900.
- The October unemployment rate unexpectedly remained unchanged at 6.9%.
- The overall increase in employment was led by service-producing jobs rising by 25,400 which more than offset a 12,200 drop in goods-producing.
The Canadian employment report showed another modest increase in October of 13,200 which was only marginally above market expectations of the 11,000 increase in the month. It is also slightly above an 11,900 increase in September although down from the 59,200 surge in August. With the increase in the labour force exactly matching the increase in employment the unemployment rate remained unchanged at 6.9%. Expectations going into the report had assumed more of a retracement in the labour force after dropping a sizeable 25,100 in September that was expected to send the unemployment rate up to 7.0%.
The overall increase in employment was achieved despite self-employed dropping 12,000 as it was offset by the employee count rising 25,200. This increase was skewed toward public employment, which rose a robust 47,300 with private-sector employment dropping 22,100.
The overall increase in employment was led by service-producing jobs rising 25,400. This more than offset a 12,200 drop in goods-producing employment. Within services, there were strong gains in accommodation and food services (29,900), health and social assistance (19,900), and public administration (19,300), which more than offset sizeable declines in business services (32,600) and trade (19,700). The weakness in goods-producing jobs largely reflected lower employment in construction (9,300) and manufacturing (6,400).
Quebec employment showed a large monthly increase of 0.8% although it was almost fully offset by the labour force rising 0.7%, which resulted in the unemployment rate only dropping to 7.5% from 7.6% in September. Saskatchewan’s employment rose a strong 0.4% in the face of a 0.3% drop in the labour force, which sent the unemployment rate down to 3.6% from 4.3%, thereby resulting in the province having the lowest unemployment rate in Canada. Employment in Ontario dropped 0.2%, which contributed to that province’s unemployment rate rising to 7.4% from 7.3% in September.
Canadian firms continued to take on workers in October at a pace close to the monthly average increase of 12,600 during the first three quarters. This does not represent a particularly robust pace of job creation as it only slightly outpaced growth in the labour force thereby resulting in minimal downward pressure on the unemployment rate. As a result, today’s report continues to weigh in favour of the Bank of Canada maintaining highly accommodative monetary conditions. Our current forecast assumes that the overnight rate of 1.00% will be retained going into 2015.
RBC