Canada gains a surprise 67,000 jobs in October, beating economists' expectations

The Canadian economy added a surprising 67,000 jobs in October and the unemployment rate ticked down to 6.9 per cent, Statistics Canada said on Friday, beating economists' expectations for the month.

While the majority of the jobs gained in October were part-time positions, "that doesn't do much to detract" from the strong headline number, wrote CIBC senior economist Andrew Grantham.

Both full-time and part-time work were up on a yearly basis. By sector, the influx of work was driven by wholesale and retail trade — which added 41,000 jobs — as well as transportation and warehousing, information, culture and recreation, and utilities.

The construction sector shed 15,000 jobs. The data agency noted that work in goods-producing industries (such as construction and manufacturing) declined between January and October, while services-producing industries gained 142,000 jobs during that same period.

Private sector jobs rose by 73,000 in October, while the number of public employees stayed flat.

Nearly one in five people who were unemployed in September found work in October, and the unemployment rate's overall drop from 7.1 per cent to 6.9 per cent "is one of the largest declines in the number of unemployed [on] record, aside from the pandemic," wrote Douglas Porter, chief economist at BMO.

The youth unemployment rate, meanwhile, fell for the first time since February as young people aged 15 to 24 gained jobs, Statistics Canada said. That jobless rate has been on an upward trend for the better part of the last two and a half years.

But the unemployment rate is still far more elevated than economists would like. "Sure, it's better than the 7.1 per cent we thought. But it's still not good," said Andrew Hencic, a senior economist with TD Bank. He cautioned that the economy is still "meandering."

"A lot of the employment gains were centered in a small number of industries, so the breadth of hiring isn't really there, which is consistent with an elevated unemployment rate," he said.

The still-high jobless rate is "indicative of a labour market that's still trying to get its feet under it, so to speak," Hencic explained. He says he expects the rate to fall gradually over the next year as economic growth turns a corner.

A few one-offs weighed on the October data, including a teachers' strike and lockout in Alberta that forced a loss in work hours. Plus, "there were a lot of signs" that the Toronto Blue Jays' World Series run made its mark on the numbers, according to Porter.

He pointed to a boost in Ontario jobs, as well as gains in information, culture and recreation, and food and accommodation — "the very sectors one would expect to get a bounce from all the activity around the playoffs."

Average hourly wages increased 3.5 per cent, or $1.27, to $37.06 per hour in October compared with the same period last year.

"Overall, today's data is supportive of the Bank of Canada's thinking that interest rates are now low enough to stimulate the economy, and we continue to forecast no more rate cuts from here," Grantham wrote in his note to clients.

Porter wrote that with the jobless rate "dipping back below 7 [per cent] and wages staying firm, it appears that the [Bank of Canada] will indeed pause in December."

And Hencic concurred: "We don't think that this is really moving the needle for the Bank of Canada in the near term. "