OTTAWA — Canada’s unemployment rate nudged down to a near four-decade low last month, seemingly shrugging off global signs of an economic slowdown, but with economists warning that the numbers weren’t entirely rosy.
Statistics Canada’s monthly labour force survey showed the country added about 54,000 net new jobs in September, driven largely by gains in full-time work, and dropping the jobless rate nationally by 0.2 points to 5.5 per cent.
The numbers surpassed analysts’ expectations that the country would gain 10,000 jobs in September, according to financial markets data firm Refinitiv.
The national statistics offices said the jobs growth was largely concentrated in the health-care sector, and notes gains in the number of public-sector and self-employed workers. The report also said 70,000 of the new jobs were full-time, as the number of part-time workers declined.
Average hourly wages, too, were up from where they were one year ago.
“Canada’s labour market has really been on a tear over the last year — job growth has been very strong, so seeing that continue through the third quarter,” said Josh Nye, senior economist with RBC Economics.
“Unemployment is low, wages are starting to pick up — wage growth was really the missing ingredient in what looked like a pretty strong labour market backdrop last year.”
The agency said the country saw a rush last month of 49,400 new positions in services industries, but a drop of 21,000 jobs in the private sector — even though year-over-year private sector jobs is actually up.
Young workers aged 15 to 24 years old saw drops in the ranks of full- and part-time workers, inching their unemployment rate to 11.9 per cent — not all that dissimilar from the same time one year ago.
Compared with a year earlier, the numbers show Canada added 456,000 jobs, for an increase of 2.4 per cent.
BMO chief economist Doug Porter said that despite the rock-solid growth in job numbers over the last year, the broader economy remains lacklustre with year-over-year GDP growth crawling along at 1.3 per cent.
“We’re getting the jobs gains, but it’s not really translating into the big gains in spending or the broader economy in terms of overall output gains. Growth is still quite modest in this country, so we’re not getting a whole lot of payback from those strong job gains,” Porter said.
“So I wouldn’t say the overall picture is entirely rosy, but it’s still I’d regard as encouraging that we’re continuing to churn out job increases.”
Avery Shenfeld, chief economist with CIBC Capital Markets, said in a note that the low jobless rate will likely cement the case for the Bank of Canada to hold its trend-setting interest rate.
But he warned that economists will keep an eye towards any data over the rest of the year suggesting a global slowdown is lapping up on Canada’s economic shores.
This report by the Canadian Press was first published on Oct. 11, 2019.
The Canadian Press