After dropping in August, employment was little changed (+21,000) in September, with both full-time and part-time work holding steady, reported Statistics Canada on Friday.
Compared with May 2022—when employment last increased—there were 92,000 (-0.5 per cent) fewer people working in September, added the federal agency.
The unemployment rate fell 0.2 percentage points to 5.2 per cent as fewer people searched for work, it said.
“Employment declined for a second consecutive month among young women aged 15 to 24, but increased among male youth and core-aged women (25 to 54 years) in September,” said StatsCan. “Gains in educational services and health care and social assistance were offset by losses in manufacturing; information, culture and recreation; transportation and warehousing and public administration.
“The number of employees in the public sector rose in September, partially offsetting declines recorded in July and August. Employment was little changed among employees in the private sector and among self-employed workers. Employment increased in four provinces, led by British Columbia, while there were fewer people working in Ontario and Prince Edward Island.
“Year-over-year wage growth remained above five per cent for a fourth consecutive month, with the average hourly wages of employees rising 5.2 per cent (+$1.57 to $31.67) compared with September 2021 (not seasonally adjusted). Total hours worked were down 0.6 per cent in September 2022. Despite declining by 1.1 per cent since June, total hours worked were up 2.4 per cent on a year-over-year basis.”
Andrew Grantham, an economist with CIBC Economics, said the Canadian labour market broke out of a three month slump by posting the rebound in employment during September.
“However, that only recovered approximately 20 per cent of the jobs lost in the prior three months combined, so the gain was certainly no home run. As expected, job growth in September was driven by a rebound in education (+46K), which had shown a suspicious decline in the prior month due to the timing of new contracts for the coming school year. Outside of that area, there was also a gain in health care, but plenty of other sectors posted declines in a sign that higher interest rates and a cooling economy are straining the labour market. Manufacturing, information, culture & recreation and transportation & warehousing posted the largest declines on the month,” he said.
“Combined with a modest decline in labour force participation, the increase in employment during September took the jobless rate down to 5.2 per cent, from 5.4 per cent in the prior month. Wage growth was a little weaker than expected, but still strong at 5.2 per cent year-over-year. The low unemployment rate and strong wage growth support the continued hawkish tone from the Bank of Canada Governor yesterday and a 50bp rate hike at the next meeting. However, signs that a growing number of sectors are slowing down should bring a more cautious approach from policymakers after that.”
Doug Porter, Chief Economist at BMO Economics, said for a change, this is a Canadian jobs report without the drama, and fully consistent with a slowing economy.
“Job conditions are certainly not cool enough to prompt the Bank of Canada to fully back off from its aggressive tightening campaign. But at the same time, the underlying calming suggests that the Bank may at least consider slowing the pace of hikes. At this point, we are still leaning to a 50 bp hike at this month’s meeting, with the Business Outlook Survey (Oct 17) and the CPI (Oct 19) having the final say,” he said.
Nathan Janzen, Assistant Chief Economist, RBC Economics, said labour markets are still very tight.
“The unemployment rate is still low, and demand for workers is still very high. Job openings have been edging lower but were running almost 60 per cent above February 2020 levels as of mid-September. And those job openings are competing for seven per cent fewer unemployed workers than pre-pandemic. That excess of labour demand versus available supply will limit the pace of further increases in the unemployment rate near-term, even as the number of job postings continues to slow, and will continue to add to wage pressures,” he said.
“Against that labour market backdrop, the Bank of Canada remains firmly focused on hiking interest rates enough to put a cap on inflation pressures. Key inflation data will be released in coming weeks as well, but at this point we continue to expect at least another 50 basis points hike to the overnight rate later this month.”
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