OTTAWA (Reuters) – The Canadian economy added a net 17,500 jobs in October, fewer than expected, while the jobless rate edged up to a 21-month high of 5.7%, Statistics Canada data showed on Friday.
Analysts polled by Reuters had forecast a net gain of 22,500 jobs and for the unemployment rate to tick up to 5.6% from 5.5% in September.
The softer than anticipated jobs report should reinforce expectation that the Bank of Canada may be done raising interest rates, especially after data this week indicated that the economy likely slipped into a shallow recession in the third quarter.
The average hourly wage for permanent employees – a figure closely watched by the central bank – rose 5.0% from October 2022, down from the 5.3% year-over-year increase in September.
The bank said last month that strong wage growth was among factors keeping underlying inflationary pressures higher than expected. The bank has projected that inflation will return to its 2% target by end-2025, but cited labor market tightness among upside risks to achieving that goal.
The unemployment rate has risen four times in the past six months, and is now at the highest level since 6.5% in Jan 2022.
With October’s job gains, the economy is averaging 28,000 monthly employment growth this year, up from 30,000 a month earlier.
Gains were in part-time jobs, that offset a small decline in full-time positions.
Employment in the goods sector increased by a net 7,500 positions, led by construction jobs.
The services sector gained 10,000 jobs, led by information, culture and recreation as well as health care and social assistance.
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