Canada Continues To Post Record High Employment And Relatively Strong Wage Gains Despite An Uncertain Economic Outlook

For the second consecutive month, Candian employment expanded very strongly in September by nearly 54,000 new jobs. Full-time employment climbed by 70,000 in September and part-time employment contracted by 16,000 jobs.

Once again most of the new jobs created in September were in the service sector, while goods-producing employment barely increased. Public sector employment rose 32,600 in the month, while private-sector jobs contracted by 21,000. Self-employment also increased by 42,100 in the month.

From a provincial perspective, Ontario (+41,000), Quebec (+14,000) and Alberta (+5,000) led the nation in terms of job creation, while employment in BC contracted by some 8000 jobs.

Canada’s unemployment rate dropped to 5.5% in September, marginally above the recent historical low of 5.4%, and hourly wages rose to a year over year pace of 4.3%.

Total employment increased by a massive 358,000 new jobs over the year in Canada, which was the strongest showing since 2002. 83% of the new jobs created over the past year were full-time.

In other words, Canada’s labor market is still providing very strong supports for consumer spending and housing demand. Indeed, it is hard to see an imminent downturn harshly affecting Canada’s economy given the recent strong improving trend in wage gains and employment.

Nonetheless, Canada’s jobs growth still seems much stronger than the economy. That is while total employment has increased by 2.4% from a year ago, Canada’s real GDP only increased by a lackluster 1.3% y/y.

In other words, the recent strong job figures together with the improving wage gains suggest that the Bank of Canada will be in no hurry to match the recent Fed interest rate cuts.