Canadian Employment Essentially Flat In October

Total employment was up 1.8K in October following a surge of 52.1K in September. Full-time jobs were up 7.3K while part-time jobs decreased 5.5K. Employment in the goods-producing sector was down 19.3K following a large gain in September (34.5K). Within the goods-producing sector, construction was the top performer (+3.5K) while agriculture lagged (- 16.2K).

The services producing sector posted gains (+21.0K), after increasing 17.6K the month before. Among services producing sector, educational services (+16.2K) was the top performer while accommodation and food services (-13.8K) lagged. At the provincial level, five provinces posted increases in employment. Thanks to a significant gain in October (+20.1K), Quebec is by far the largest beneficiary accounting for 61% of all Canadian jobs created over the last 6 months (bottom chart). On the other hand, British Columbia (-10.9K) & Ontario (-9.9K) were the worst performers this month. The national unemployment rate remained unchanged at 7.4%.



OPINION: A flat month coming after a huge gain of 52.1K the month before is usually good news (top chart). However, this was not the case this time. The details of the report were much worse than the headline number with the private sector showing a loss of 21K in October, the fourth decline in six months. Over the period, the private sector is actually showing a loss of 12K jobs, compared to a surge of 76K jobs in the public sector (middle chart). No less than 83% (63K) of these gains were in the education sector!

This is a conundrum and this pace is for sure unsustainable especially in the context of looming spending cuts in a number of provinces next year. As for the private sector, with earnings of TSX companies down 30% so far in Q3, we do not expect a hiring spree anytime soon. Labour markets conditions are likely to remain difficult in the months ahead.