On May 13, 2024, a window cleaner was seen working in Vancouver. On Friday, Statistics Canada reported that the country's unemployment rate remained unchanged at 6.5% in October. The photo was taken by Hunter Soo for CBC.
Canada’s unemployment rate stayed at 6.5% in October, showing no change from the previous month, as per data released by Statistics Canada on Friday. Job growth remained modest, with only 14,500 new positions added, falling short of the expectations set by economists, who had predicted nearly double that number.
The job gains primarily came from full-time positions, particularly in sectors such as business, construction, and other support services. However, these gains were offset by job losses in finance, insurance, real estate, rental, leasing, and public administration. This balance maintained the overall employment rate, preventing significant movement in the statistics.
A positive development was observed in the total hours worked, which saw a 1.6% increase compared to the previous year. Additionally, average hourly wages experienced a 4.9% rise, amounting to an increase of $1.68, bringing the hourly average to $35.76. These wage hikes were a hopeful sign, indicating that despite the stagnant employment rate, workers’ income levels have been improving.
Youth employment showed its first rise since April, which provided a brief glimmer of optimism. Yet, this uptick couldn’t fully counter the 2.7 percentage point drop seen over the past year, reflecting ongoing challenges for young job seekers in securing stable employment.
The broader context highlights Canada’s economic struggle with high interest rates and persistent inflation. Despite four rounds of interest rate cuts intended to stimulate business investment and job creation, demand remains suppressed. This economic strain has contributed to a larger workforce vying for the same limited number of jobs, resulting in a decline in the overall employment rate.
The total number of workers entering the labour force has surged by 2.4% compared to last year, thanks in large part to record-breaking immigration numbers. Yet, despite this influx of available talent, the employment rate has shown a steady downward trend, with October’s figures dipping to 60.6% from 61.9% a year ago. This suggests that while there are more individuals seeking work, the economy hasn’t kept pace in providing sufficient job opportunities.
Avery Shenfield, an economist at CIBC, noted in a message to clients that this latest job report did not settle the ongoing debate over the next potential rate cut by the Bank of Canada. "With only one more job report due before the Bank's next interest rate decision, today’s mixed data leaves the 25 versus 50 basis-point cut still open for discussion," Shenfield commented, leaning toward another 50 basis-point reduction.
Last month, Bank of Canada Governor Tiff Macklem indicated that layoffs remained relatively low. However, business hiring has been sluggish, which has had the greatest impact on young workers and recent immigrants. Macklem conveyed hope that continued rate cuts would foster economic growth and job creation. Nonetheless, the struggle to balance growth, employment, and inflation remains an ongoing challenge for policymakers.
