November 04, 2022 | 09:09
About that Canadian Slowdown ...
Canadian employment surged 108,300 in October, blasting past consensus and washing away the sluggish results over the prior four months. This report was strong like bull with no significant soft spots, and lifted employment to a fresh all-time high. Just a few brief shows of strength: Full-time jobs popped 119,300, private sector payrolls rose a sturdy 73,800, total hours worked clocked in a robust 0.7% gain, and average hourly wages accelerated to a 5.6% y/y pace (from 5.2%). True, the unemployment rate only held steady at 5.2%, but that's because the part rate rose 2 ticks to 64.9% on a surge in the labour force (up a towering 110,000).
By sector: Even by industry, the report flashed strength, as manufacturing (+24k) and construction (+25k) saw the biggest gains. Services weren't left out, however, as hotels & restaurants found 18k new workers, and three other service groups also had double-digit gains. Wholesale & retail trade was the only industry to report a notable decline (-20k), which does bear watching.
By region: It was a royal flush among the provinces, as all 10 saw job gains last month (albeit some increases were modest). Ontario (+43k) and Quebec (+28k) led the way, pounding out gains roughly in line with their share of the population. The latter now boasts the lowest unemployment rate in the nation at just 4.1%, with B.C. right behind at 4.2%. We'll note tiny PEI, which saw its jobless rate plunge almost 3 ppts to 5.4%, the second lowest on record.
Bottom Line: After summer doldrums, Canadian employment has rebounded with purpose in the Fall, raising some serious doubts over the extent of any economic slowdown. We had expected GDP growth to basically stall in Q4 after a modest gain of around 1.5% in Q3. Instead, the big bounce in hours worked in October leave them up 1.3% at annual rates versus the Q3 level, consistent with at least moderate GDP growth this quarter. Having said that, we know that Canadian jobs reports are notoriously volatile, and no one will hang their forecasting hat entirely on one LFS result. But, as the opening salvo for Q4, the quarter is off to a strong start. Beyond the sturdy growth implications, the BoC will also cast a wary eye on the renewed upswing in wages.