'Low layoff rates have kept lid on unemployment rate,' says economist
Despite the unemployment rate remaining unchanged for the third-straight month, the economy gained 64,000 new positions in September.
According to the latest figures released by Statistics Canada, the jobless rate remined steady at 5.5%.
The rate of new employment was concentrated largely among core-aged women (25 to 54 years old), which saw an increase of 37,000, while those same-aged men gained another 32,000 new jobs. For youth 15 to 24 years old and people 55 years old and older, there was little change.
While the news remains good, not all numbers represent a positive sentiment in corporate Canada, according to one economist.
“Strong headline, softer details. The Canadian labour market continues to hold up amid gloomy consumer and business sentiment. While the 64,000 employment increase isn’t especially eye-popping given Canada's rapid population growth, it was fast enough to push the overall employment rate higher,” says Brendon Bernard, Indeed senior economist.
“Throughout 2023, low layoff rates have kept a lid on the unemployment rate, even as GDP growth has flat-lined.”
The employment rate rose to 62%, representing a rise of 0.1 percentage points.
The positive gains came in greater than August’s numbers, which saw an increase of 40,000 new jobs.
Quebec, B.C. posted highest job numbers
Provincially, Quebec saw another 39,000 workers employed, leading all others, while British Columbia also gained 26,000 new jobs. Employment dropped in Alberta which recorded a loss of 38,000, while New Brunswick employment dropped by 2,700, according to Statistics Canada.
When it came to money earned by Canadians, the news was positive for the first time in two months. Average hourly wages increased by 5% in September which came in at a gain of $1.63 per hour to $34.01, after dropping by 4.9% in August and 5% in July.
“Perhaps as surprising as the overall pace of job gains was that wage growth kept chugging. There’s been a steep drop off in Canadian employer recruiting activity, yet paycheques continue to grow briskly, at a 5% year-over year pace. It’s clear that overall wage growth tends to react with a lag to other developments in the labour market,” says Bernard.
More government employees on public payrolls
Employment growth was largely positive, especially in the public sector as the number of employees increased by 37,000 in September, which at 0.9% gain, represented the first increase since January, found the survey.
On a year-over-year basis, public sector employment increased by 86,000, and accounted for 15.5% of the overall net increase in employment of 552,000 over the same period.
“One area where this is showing up is in the public sector, where pay gains are starting to catch up to recent growth in the private sector. However, with other economic data coming in weak, the headline rate of wage growth could keep inflation lingering for longer,” says Bernard.
Educational services and transportation and warehousing industries saw increased ((66,000 and 19,000 new jobs respectively), whereas finance, insurance, real estate, rental and leasing (a loss of 20,000 jobs), construction (18,000 less positions) and information, culture and recreation at 12,000 fewer works, all saw job losses.
