Canada October Employment - Even weaker outside public sector correction
Canada’s 4.7k decline in October employment is not as sharp as in the two preceding months but looks worse in the details. September’s 68.3k decline was fully explained by a 70k decline in the public sector. October’s decline came despite a 49.6k rebound in the public sector.
With the labor force up by 28k unemployment increased to a 6-month high of 6.7% from 6.5%. The Bank of Canada is more focused on inflation than growth but emerging weakness of economic weakness does suggest tightening at successive meetings might be too aggressive.
There is an expectation that fresh USD tariffs will briefly slow growth in Q4. The data does not however suggest the story is simply one of tariffs, with manufacturing actually managing a 3.8k increase. Construction was firm at 15.6k suggesting it could be resilient to rate hikes. The weakness came in private sector services.
Wage data was also weak, with yr/yr growth for permanent employees returning to August’s level of 2.0% after a correction higher to 2.3% in September.
