Canada’s economy gains 54,000 jobs, blowing past expectations and pushing unemployment rate down to 5.5%
OTTAWA — The Canadian economy added a stronger-than-expected 53,700 net jobs in September, with all the gains coming in full-time work and largely driven by the services sector, Statistics Canada data showed on Friday, reducing analysts’ expectations for a central bank rate cut this month.
The national unemployment rate fell to a near-record low of 5.5 per cent from 5.7 per cent in August while wages for permanent employees rose 4.3 per cent year-over-year. Analysts in a Reuters poll had forecast a gain of 10,000 jobs and an unemployment rate of 5.7 per cent. Canada hit an all-time low jobless rate in May at 5.4 per cent.
The big picture here is the job market remains quite strong
BMO chief economist Douglas Porter
The Canadian dollar strengthened to C$1.3225 to the U.S. dollar after the bigger than expected jobs gain.
Canada’s central bank has not moved interest rates since October 2018, even as some of its counterparts – including the U.S. Federal Reserve – have eased. The bank’s next overnight interest rate decision is set for Oct. 30.
In September, the Bank of Canada said the economy was showing a welcome degree of resilience against negative shocks, in part because of the labor market.
“The big picture here is the job market remains quite strong,” said Doug Porter, BMO’s chief economist on Friday. “The market had been pricing in a very low chance the bank was going to cut rates. This further knocks down those chances.”
Bill Adams, vice-president of PNC Financial Services Group, agreed. “With the unemployment rate back down to near the lowest since comparable data began in the 1970s, I think the jobs report argues against a rate cut at the Bank of Canada’s October decision,” he said in an interview.
Statscan said the services sector gained 49,400 jobs in September, mostly in the healthcare and social assistance sectors, while the goods-producing sector saw an increase of 4,300, because of the construction industry. Meanwhile, the number of full-time jobs rose by 70,000, while part-time jobs fell by 16,300.
Friday’s employment figures are also expected to be one of the last major economic releases before a national election on Oct 21. The figures will likely be welcomed by Canadian Prime Minister Justin Trudeau, whose governing Liberals are facing a tight re-election campaign against the opposition Conservatives.
Ontario, Canada’s largest province and a key political battleground in an election that has largely focused on economic issues, gained a net 41,100 jobs in September, far outpacing its other provincial and territorial counterparts.