Canadian employment jumps 44K in October, thanks to election

Employment jumped up sizeable 44K in October, thanks to hiring related to the Federal election. Job gains outpaced growth in the labour force, taking the unemployment rate down one tick to 7.0%.

Public administration added 32K jobs in October, with Statistics Canada citing that the increase seen across all provinces was mainly temporary work that coincided with the federal election. Hiring, however, was not confined to the public sector, with the private sector adding 41K new jobs in October. The healthy private and public sector job gains were partially offset by a lower number of self-employed. Apart from public admin, services sector hiring continues to hold up well elsewhere, with retail and wholesale trade (+18k) and accommodation and food services (+13K) also making notable gains in October.

On the negative side, the resource sector continued to shed positions in October (-8K). Over the past year, resource sector jobs have fallen by 6.9% due to the impact of the collapse in oil prices.

The employment picture varies across the country, with the greatest deterioration over the past year seen in oil and gas producing provinces. Alberta's unemployment rate has risen the most to 6.6% in October (+2.2%-points). Whereas the strongest growth in employment over the past year is right next door in B.C, where employment has advanced by 3%.

Wage growth continued to be strong in October, up 3.1%. Growth in wages has been running ahead of inflation for some time now, despite an overall softening in labour market conditions in Canada over the past year.

Despite a contraction in real GDP in the first half of 2015, Canada's labour market continues to hold up better than expected. In October, part of this can be chalked up to temporary election-related hiring, but private sector job growth was still strong. Given the softer tone in recent surveys of hiring intentions, we do expect employment gains to slow in the coming months, leading to a gradual decline in the unemployment rate.

"The very strong jobs report south of the border today is arguably the more important number, and suggests that rate hikes in the U.S. are not far away. This will act to tighten financial conditions in Canada. Add to that the significant excess capacity in Canada's economy with only modest growth ahead, and despite the resiliency of Canada's job market to date, the Bank of Canada is likely to leave interest rates at their current stimulative setting for quite some time", notes TD Economics.