Canada Unemployment Rate Stays 7.4% as Job Growth Slows
Canada’s unemployment rate remained at 7.4 percent in October as job growth slowed, with gains in public-sector work curbed by a decline in agriculture.
Employment rose by 1,800 following September’s 52,100 gain, Statistics Canada said today in Ottawa. Economists surveyed by Bloomberg News projected job creation of 10,000 and 7.4 percent unemployment, according to median of 23 forecasts.
The report is the second this week signaling a tepid expansion toward the end of the year. Statistics Canada said two days ago that gross domestic product shrank for the first time in six months in August on mining maintenance shutdowns and lower factory production. Finance Minister Jim Flaherty cut economic growth and revenue projections on Oct. 29 on signs of global weakness.
“Labor market conditions are likely to remain difficult in the months ahead,” said Matthieu Arseneau, senior economist at National Bank of Canada (NA) in Montreal. Gains in public sector work such as education are “unsustainable” with several provinces cutting spending next year, he said in a client note.
Employment in the public sector grew by 36,900 last month while private companies cut 20,300 jobs, Statistics Canada said. Agriculture employment declined by 16,200, while education jobs rose by the same amount.
The Canadian dollar was little changed at 99.61 cents per U.S. dollar at 10:32 a.m. in Toronto, after weakening as much as 0.2 percent before the report. Non-farm payrolls in the U.S. rose by 171,000 workers, more than economists forecast, a Labor Department report in Washington showed.
Canada’s part-time employment fell by 5,500 in October while full-time positions rose by 7,300, according to the report. Workers designated by Statistics Canada as self-employed decreased by 14,900 in October while employees rose by 16,600.
Average hourly earnings of permanent employees rose 3.9 percent in October from a year earlier, exceeding the prior reading of 3.3 percent.
Mondelez International Inc. (MDLZ), the snacks and coffee business spun off from Kraft Foods Inc., said yesterday it’s closing a biscuit bakery in Toronto that employs 550 people.
Bank of Canada Governor Mark Carney told lawmakers two days ago that “slack” remains in the labor market more than three years after the world’s 11th largest economy emerged from a recession. Carney has kept his key lending rate at 1 percent in the longest pause since the 1950s as Europe’s debt crisis and slow U.S. growth restrain exports.
Unemployment will average 7.2 percent next year and 6.8 percent in 2014, according to a Bloomberg economist survey.
“There are still too many Canadians looking for work and we are committed to keep supporting the economy,” Flaherty said in a statement from Ottawa today. “We face challenges from economic turbulence beyond our borders especially in Europe and the United States.”
To contact the reporter on this story: Greg Quinn in Ottawa at firstname.lastname@example.org