The unemployment rate increased to 6.7 percent in October, according to Statistics Canada, as more individuals began searching for employment.
This marks a rise from 6.5 percent in September, accompanied by a decline of 4,700 jobs.
The job losses in October follow significant declines in employment during August and September, where the Canadian economy lost over 100,000 jobs combined across the two months.
Prior to the report’s release, economists surveyed by Reuters had anticipated an increase of 13,600 jobs for October, expecting the unemployment rate to stay the same.
CIBC senior economist Andrew Grantham noted that the recent trend of job losses indicates a degree of slack in the Canadian economy.
“Although the Canadian Labour Force Survey is known for its volatility, three consecutive monthly declines represent a trend that cannot be overlooked,” Grantham stated in a communication to investors.
In October, private sector employment dropped by 53,000 positions, marking the first decrease in this sector since February. Conversely, public sector employment, which had seen a decline for four consecutive months, increased by 50,000.
Year-over-year data from Statistics Canada indicate that private sector jobs have increased, whereas public sector jobs have decreased.
The unemployment rate for the core workforce aged 25 to 54 remained stable.
However, unemployment for individuals aged 15 to 24 climbed by 0.7 percentage points to 13.7 percent.
Young workers have experienced a challenging job market in recent years, although there had been minimal fluctuations in the jobless rate for this age group over the summer months.
Statistics Canada reported that students had a higher unemployment rate compared to youth not enrolled in school.
The wholesale and retail trade sector has shown a downward trend over the past year and led the job losses in October, losing 29,000 positions. The transportation and warehousing, as well as food and accommodation sectors, also experienced losses last month, countered by some gains in construction and education.
According to Statistics Canada, the layoff rate, which reflects the percentage of individuals employed in September who were laid off by October, remained “virtually unchanged” from the previous year at 0.7 percent.
Average hourly wages experienced a 2.2 percent annual increase in October, slightly down from 2.3 percent in September.
Alberta and British Columbia both reported significant fluctuations in job numbers. Alberta lost 24,000 jobs, erasing the previous month’s gain of a similar amount, leading to an increase in unemployment to 7.3 percent. In contrast, B.C. gained 12,000 jobs following losses in September.
The job statistics for October were released shortly after the Bank of Canada implemented its first interest rate increase in over three years. Central bank officials indicated that the economy’s resilience and concerns about inflation warranted a quarter-point increase in the policy rate to 2.5 percent.
After maintaining interest rates for nearly a year, the Bank of Canada has increased the policy rate to 2.5 percent. Bank governor Tiff Macklem stated that the increase was essential to combat inflation caused by rising energy costs.
The job losses are occurring concurrently with the repercussions from Canada-U.S. trade negotiations that stalled late last summer. Tu Nguyen, an economist with RSM Canada, suggested that this situation might be causing employers to hesitate in their hiring decisions.
<p"When trade discussions came to a standstill, it created uncertainty among investors and businesses," Nguyen told CBC News.
She anticipates that the unemployment rate may continue to rise as the year concludes. However, initiatives by the federal government aimed at boosting investment in Canada, including those outlined in the recent budget, could potentially help generate new jobs in 2027.
<p"Strategies like the productivity mega-deduction are expected to attract substantial investment to the economy, which is beneficial for job creation," Nguyen explained.
The sluggish job market may lead the Bank of Canada to keep interest rates steady during its upcoming December meeting, Nguyen predicts, rather than opting for further increases.
