Written by Promit Mukherjee
OTTAWA (Reuters) – Canada added 14,500 fewer jobs than expected in October and wages for full-time workers rose, data showed on Friday, as the economy struggled to contain a slowdown created by rapid population growth amid a hot market.
The unemployment rate remained unchanged from September but rose to a nearly 34-month high of 6.5%, Statistics Canada said.
Analysts polled by Reuters had estimated a net addition of 25,000 jobs and a rise in the unemployment rate to 6.6%.
Canadian business investment and hiring have been muted even after four rate cuts as high interest rates and inflation have dampened demand, as the workforce continues to grow, fueled by immigration.
This has increased the number of people looking for jobs and not staying, which has led to a decrease in the employment rate, or the number of people employed out of the total workforce.
Canadian workers increased by 2.4% from last year, boosting the economy with workers, but the employment rate continued to decline as October showed it fell to 60.6% from 61.9% last year, raising the unemployment rate.
Bank of Canada Governor Tiff Macklem said last month after the rate cut decision that layoffs have remained modest but business hiring has been weak, and that has affected young people and newcomers to Canada.
However, Macklem expressed his hope that continued interest rate cuts will help grow the economy and increase job opportunities.
The youth unemployment rate – aged 15 to 24 – fell 0.7 percentage points in October to 12.8%, the statistics agency said, adding that its employment rate rose for the first time since April.
The Bank of Canada lowered its key policy rate by a cumulative 125 basis points to 3.75% in a major cut of 50 basis points last month in an effort to support economic growth and absorb excess labor.
Before the jobs report was released, stock market bets indicated a 62% chance of a 50-point cut on December 11.
Average hourly wage growth for full-time workers increased to 4.9% in October from 4.5% in September, the agency said.
The increase in employment came from full-time employment, while part-time employment decreased. Additions were broad as the goods and services sector showed healthy growth.
