Canada’s economy adds jobs in October, unemployment rate falls to 5.8 pct

Canadian economy, on net, added 11.2k jobs in October. The jobless rate dropped slightly in the month to 5.8 percent. Full-employment mainly drove the headline figure, with 33.9k net positions added. Part-time work dropped 22.6k. The overall gains were driven by the private sector as public sector employment dropped, leaving a 21.8k gain in self-employment as the deciding factor.

The gains in employment were focused among core-aged workers, rising 31k on net. The ones aged 55+ also recorded gains, which signifies that those aged 15 to 24 saw a huge drop of 39k.

Industry wise, the goods sector recorded a fall of 12k, while the service sector added 23.2k, with notable gains in trade, business support services and healthcare. Only Quebec recorded employment gains of note, adding 9.1k as performances were flat in the other provinces. Aggregate hours worked rose slightly. Hourly wages for permanent employees slowed for a fifth month, gaining only 1.9 percent year-on-year.

The report for October was a soft report overall. The decline in jobless rate could be largely because of fewer Canadians engaging with labor markets, which is not an encouraging sign. Even if the economy added jobs on net, these gains are mainly because of self-employment, noted TD Economics in a research report.

The increased volatility over the summer months could be because of changes in seasonal employment. Youth employment holding back the overall figure for October implies that this impact might still be in play and so this month’s figures need to be taken with an even larger grain of salt than normal.

“On balance, today's data doesn't help the case for an accelerated pace of tightening, but still leaves January a reasonable target for the next move up”, added TD Economics.

At 17:00 GMT the FxWirePro's Hourly Strength Index of Canadian Dollar was neutral at -49.7946, while the FxWirePro's Hourly Strength Index of US Dollar was slightly bearish at -71.3282. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex