Full-time falls by 16,900, part-time rises by 80,200: Statistics Canada
OTTAWA (Reuters) - The Canadian economy added more than twice as many jobs as expected in September, although all of them were part-time, cementing market expectations that the Bank of Canada would raise interest rates again later this month.
Statistics Canada on Friday reported a gain of 63,300 jobs in September and said the jobless rate had edged down to 5.9 per cent from six per cent in August. Analysts in a Reuters poll had forecast a gain of 25,000 positions. Full-time employment dropped by 16,900 jobs while part-time positions rose by 80,200.
Average hourly wages, a figure watched closely by the central bank, rose by 2.2 per cent in September from a year earlier. This was the smallest year-on-year increase since the 2.2 per cent gain in September 2017.
On a year-over-year basis employment rose by 222,400 jobs, or 1.2 per cent. The six-month average for employment gains rose to 14,800 jobs from 9,700 in August.
The headline hides some softer details, said Royce Mendes, senior economist at CIBC Economics.
"The Labour Force Survey estimate of employment continued its wild ride, posting a massive gain, well ahead of consensus expectations and closing some of the gap that has opened up between this survey and the payroll survey of employment," he said. "While that was all driven by paid employment, it did apparently come in the part-time sector, taking some of the shine off of the headline reading.
"Overall, the headline surprises will support the Canadian dollar and yields today, but they likely overstate the positives for the economy given the underlying details."
On the surface, it was quite impressive, said Doug Porter, chief economist at BMO Capital Markets, "but, digging in the details, it wasn't quite as glittery as the headline, given that all the gains were in part-time employment.
"Essentially this was almost a reversal of what we saw in August. From a big picture view, the economy is still adding roughly 20,000 jobs a month and the unemployment rate is moving lower and wages are running above core inflation," he said.
"Overall, it suggests the economy is staying on track. I think the Bank of Canada was very much leaning in the direction of raising rates in October and this report will do nothing to dissuade them.
The one surprise is that wages are still coming in softer than we might have expected at this point in the economic cycle, said Nathan Janzen, senior economist at RBC.
"But, with labour markets looking pretty tight, we still think that that measure, on balance, is going to trade higher," he said.
"I think it's just another reason for the Bank of Canada to go ahead with another rate hike in October. One of the big uncertainties on trade just got a lot smaller earlier this week with the new trade deal."
