The naysayers may be continuously talking about recession but the Canadian economy doesn’t seem to be listening. There was enough optimism about the future shown by Canadian employers, in October to boost employment by 108,300 (+0.6%) in October, recouping all the losses observed from May to September.
The strong job growth, in manufacturing in particular, lifted employment to an all-time high of 19.656 million.
By industry, the job increases spanned 11 of 16 industries, according to Alan Arcand, chief economist, Canadian Manufacturers & Exporters. The strongest gains were observed in construction (+24,600), manufacturing (+23,800), and accommodation and food services (+18,300). Wholesale and retail trade (-20,200) was the only industry to report a notable decline.
“The October jobs report blew away expectations. The rebound in employment, the surge in hours worked, and the acceleration in wage growth all raise some questions about the extent of the economic slowdown. The strong labour market data also support analysts’ expectations of a 50-basis point interest rate hike from the Bank of Canada in December,” Arcand said.
Manufacturing employment rose by 23,800 (+1.4%) in October, the first increase in three months and largely offsetting the decrease of 27,500 (-1.6%) in September. Still, even with this gain, the manufacturing sector has shed 21,700 workers since the beginning of the year. As of October, employment in the sector stood at 1.744 million.
The headline unemployment rate held steady at 5.2% in October, 0.3 percentage points above the record low observed in June and July. At the same time, the jobless rate in manufacturing decreased for the first time in six months, falling 0.2 percentage points to 3.7%.
Average hourly earnings in manufacturing rose 1.3% in October, the biggest one-month gain since January 2022. Accordingly, year-over-year wage growth accelerated to 5.6%, more than double the sector’s historical average of 2.5%. The strong wage growth is consistent with the results of CME’s recently released 2022 Labour and Skills Survey, which shows that manufacturers continue to face severe labour shortages.