The Canadian economy added jobs in September, but did little to recoup the losses of the last three months, while the jobless rate beat forecasts, edging down as fewer people looked for work, official data showed on Friday.
Canada added a net 21,100 jobs in September, in line with forecasts, though mostly in part-time work, while the jobless rate dropped to 5.2% from 5.4% in August, Statistics Canada data showed.
The September employment gain ended a three-month streak of losses, though it barely dented the 113,500 net jobs lost in June through August. The drop in Canada’s unemployment rate came as fewer people searched for work, Statscan said.
“Given the declines of the previous three months, this is a pretty tepid rebound,” said Andrew Kelvin, chief Canada strategist at TD Securities.
“The unemployment rate falling, it looks like a good thing at face value, but a lot of that does reflect a lower participation rate.”
Canada’s labor force shrank by a net 20,300 in August, while the participation rate edged down to 64.7% from 64.8%.
Wage growth for permanent employees eased to 5.2% from 5.6% in August, but was above 5.0% for the fourth consecutive month.
“The (Bank of Canada) would have been very concerned to see wage growth accelerate. They would prefer to see wage growth decelerate here,” said Kelvin, adding: “It does reduce one angle of worry. It speaks to the deceleration in the economy.”
Central bank Governor Tiff Macklem made clear on Thursday the bank would not yet be pivoting away from its rapid pace of interest rate increases. Money markets have fully priced in a 50-basis-point increase on Oct. 26.
“The low unemployment rate and strong wage growth support the continued hawkish tone from the Bank of Canada Governor yesterday and a 50-bp hike at the next meeting,” Andrew Grantham, senior economist at CIBC Capital Markets, said in a note.
Statistics Canada also provided new data on Canadians aged 55 to 64 who were not in the labor force, with 57.5% – or roughly 1 million – saying they were retired. There were 3.4 million Canadians aged 55 to 64 active in the labor force in September.
Canada is grappling with a mass exodus of its most highly skilled workers, as more people than ever are retiring.
The Canadian dollar was trading 0.1% higher at 1.3735 to the greenback, or 72.81 U.S. cents.
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