Preview: Due November 6 - Canada October Employment - Correction from public sector-led loss
We expect Canadian employment to increase by 20k in a correction from two straight sharp declines, though the rise should be seen as corrective with the economy likely to lose some momentum in Q4 due to fresh US tariffs. We expect unemployment to remain at September’s 6.5% rate, up from 6.4% in July and August.
September’s 68.4k decline in employment was exceptional and more than fully explained by a 70k decline in the public sector, with most of that coming in Quebec. Trend in the public sector is negative with September’s decline being the fourth straight, but we expect the public sector to see a pause in October. We expect the rise, like September’s loss, to be roughly evenly split between full-time and part-time work.
We expect the private sector to rise by 15k, and self-employment to rise by 5k, both in line with trend. We expect goods employment to fall by 10k largely on tariff-impacted manufacturing while private sector services rise by 30k. The latter sector has been volatile recently but a 30k rise would be in line with trend.
We expect a modest 10k rise in the labor force allowing unemployment to fall to 6.485% from 6.53% before rounding. The labor force fell by a steep 52.9k in September so a larger rise than our forecast is a risk, making a return in unemployment to 6.4% unlikely without a strong rise in employment.
Recent months have seen a significant slowing in the average hourly wage for permanent employees. September’s 2.3% was up from August’s 2.0% but well below 3.7% in June and the year to date high of 5.1% seen in March. We expect October’s pace to slow marginally to 2.3%.