Canada's Unemployment Rate Rises to 6.7% as Labour Market Sheds Jobs for Third Consecutive Month
Statistics Canada reported that the unemployment rate climbed to 6.7% in October as the economy lost 4,700 jobs, marking a third straight month of employment declines. Private sector losses were largely offset by public sector gains, while youth unemployment jumped to 13.7%.
Canada’s labour market contracted for a third consecutive month in October, with the economy shedding 4,700 jobs and the unemployment rate rising two-tenths of a percentage point to 6.7 per cent, according to Statistics Canada. The decline followed a cumulative loss of 110,000 jobs across August and September.
The results fell well short of expectations. A Reuters poll of economists had forecast a gain of 13,600 positions for the month. Economists expressed concern over underlying softness in the labour market after three straight months of job losses.
Private sector employment dropped by 53,000 positions in October, its first decline since February. Public sector employment increased by 50,000 positions, partially offsetting the private sector losses.
Wholesale and retail trade led the overall job losses, shedding 29,000 roles. The transportation and warehousing sector, along with food and accommodation, also posted declines. Construction and education were among the sectors that recorded gains.
Young workers faced particularly difficult conditions. The unemployment rate for those aged 15 to 24 jumped to 13.7 per cent in October, indicating a tough labour market for younger Canadians.
Average hourly wages rose 2.2 per cent annually in October, slowing slightly from the 2.3 per cent annual increase recorded in September. The layoff rate remained virtually unchanged compared with a year earlier at 0.7 per cent.
The data arrives shortly after the Bank of Canada raised its policy interest rate by a quarter of a percentage point to 2.5 per cent. Soft labour market figures, combined with declining oil prices, may reduce pressure on the central bank to raise rates further. As of Friday afternoon, financial markets placed the odds of another quarter-point hike at the Bank of Canada’s December meeting at 35 per cent.