Canada Unemployment Rate Holds at 6.9% in October

Canada’s unemployment rate remained at the lowest since 2008 in October as government workers led the third straight month of job gains.

Employment rose by 13,200 and the jobless rate held at 6.9 percent, Statistics Canada said today in Ottawa. Economists surveyed by Bloomberg News projected unemployment would increase to 7 percent and employers would add 11,000 positions, according to median forecasts.

Employment has continued to rise while companies restrict capital spending in the face of tepid demand for exports that has curbed expansion of the world’s 11th largest economy. The Bank of Canada on Oct. 23 cut its growth forecast and dropped language about raising interest rates in part because of the amount of slack in the economy.

“These good jobs numbers were not enough to change anyone’s conviction that the Bank of Canada is on hold for some time to come,” said David Love, a trader of interest-rate derivatives in Montreal at Le Groupe Jitney Inc., a brokerage.

The Canadian dollar depreciated 0.3 percent to C$1.0499 per U.S. dollar at 9:25 a.m. in Toronto. One Canadian dollar buys 95.23 U.S. cents. Bonds fell, with the yield on the benchmark two-year government note rising 3 basis points to 1.13 percent.

Public sector employment rose by 47,300 in October while private employers fired 22,100 workers, Statistics Canada said today.

Service Gains

Accommodation and food services led the job gains by industry with an increase of 29,900, bringing its 12-month employment gain to 7.2 percent. Health care and social assistance jobs rose by 19,900 while public administration jobs rose by 19,300 last month.

“All the signs from the labor market are relatively positive,” said Mark Chandler, head of fixed-income strategy at Royal Bank of Canada’s RBC Capital Markets unit, by telephone from Toronto. The gains suggest third-quarter economic growth may have been faster than the central bank’s 1.8 percent estimate, he said.

The U.S. today also reported that payrolls rose by a more than forecast 204,000 workers in October while the jobless rate rose to 7.3 percent from an almost five-year low of 7.2 percent.

Canadian full-time employment rose by 16,000 in October and part-time positions declined by 2,700.

Workers designated by Statistics Canada as employees rose by 25,200 and the self-employed category decreased by 12,000.

Goods Losses

Goods producers fired 12,200 workers in October, Statistics Canada said, with declines of 9,300 in construction and 6,400 in factory work.

Aerospace manufacturer Heroux-Devtek Inc. said this week that 40 employees will be temporarily laid off from its Longueuil, Quebec, factory because of a drop in orders from the U.S. Air Force for landing gear repairs.

The labor force participation rate remained at the lowest in more than a decade in October at 66.4 percent. Last month’s report showed that the unemployment rate fell as young people dropped out of the labor market.

Average hourly wages of permanent employees rose 1.7 percent in October from a year earlier, trailing the prior reading of 1.8 percent.

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