Job Bounce Ends Months of Stagnation
- In September, employment in Canada rose modestly, marking its first increase after four months of little to no change. The labour force expanded by 0.1 per cent and the unemployment rate slipped 0.1 points to 6.5 per cent.
- Total employment in the service economy increased by 50,200, with sizeable gains recorded in the information, culture and recreation industry (+21,900), wholesale and retail trade (21,900) and in professional, scientific and technical services (+20,600). Meanwhile, employment decreased by 3,600 in the goods-producing sectors, driven by declines in the primary (–8,400) and manufacturing (–4,600) sectors.
- Across Canada, employment rose in seven of the ten provinces. The increase was led by Ontario (+43,200) and Quebec (+21,700). However, the job count declined in British Columbia (–18,000), Alberta (–7,600) and New Brunswick (–4,100). In the remaining provinces, employment was essentially unchanged.
- On a year-over-year basis, average hourly wage growth rose by 4.6 per cent, a reduction on the 5.0 per cent pace recorded in the previous month.
Key Insights
Still elevated interest rates, weakening demand and discretionary spending as well as prevailing uncertainty about the future are all exerting pressure on business investment and hiring activity. According to our latest Index of Business Confidence, firms remain pessimistic about the business environment.
Tepid business sentiment is reflected in the job market, where, according to data from the Job Vacancy and Wage Survey, job openings declined for the eighth consecutive quarter. A rise in the unemployment-to-job vacancy ratio over the last two years indicates a labour market swinging from excess demand towards excess supply. Nevertheless, the trend has caveats, with persistent labour shortages in certain sectors, such as construction and health care and social assistance, where the job vacancy rate and number of long-term vacancies remains elevated relative to historic norms.
Federal government targets affecting temporary foreign workers will increasingly hinder businesses’ ability to recruit low-wage labour from abroad, although certain sectors will be exempted. The Canadian labour force is becoming increasingly skilled. Today, 57.5 per cent of Canadians aged 24 to 64 possess college or university credentials, positioning Canada as a leader among G7 nations in terms of workforce education—as a result, employers in low-skilled sectors will need to refine their bargaining strategies to attract and retain workers.
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