Canada’s economy shed jobs after two strong months sending the loonie lower even as the unemployment rate was unchanged and wages rose more than expected.
Statistics Canada reported a loss of 1,800 positions in October on Friday following gains of 53,700 in September and 81,000 in August. The median estimate was for 15,900 new employees. The unemployment rate was stable at 5.5% as predicted but annual hourly wages rose 4.36%, better than the 4.25% forecast.
Canada Employment Change
Full-time positions dropped 16,100 while part time work rose 14,300.
The Canadian Dollar fell about one-third of a figure against the US currency on the release slipping from 1.3203 to 1.3239 but regaining about half of that within the hour.
The weak employment report does not alter the strong, if volatile performance of the Canadian labor market this year. In past six months there have been three positive months averaging 54,200 and three negative at -9,400. Going back 12 months there are eight positive and four negative with the positive average 61,200 far outstripping the negative at -8,900.
One soft print for employment is unlikely to indicate a slowing job market, especially in the context of the statistics of the past year.
Were job creation to slow it could pressure the Bank of Canada to reconsider its stable rate policy. Unlike its American neighbor the BOC has not cut rates this year in the face of declining global growth and the threat of US China trade war. The Canadian base rate has been at 1.75% for a year and the last move by the BOC was a 0.25% increase in September 2018.
The Federal Reserve has reduced its main rate by 0.75% since July citing the risks to the US expansion from ebbing global economic growth and the US China trade dispute. After the last cut on October 30th Chairman Jerome Powell said the economy was in a “good place” and strongly hinted that the rate adjustment was over and the bank would await developments.
Bank of Canada Overnight Rate
The Canadian economy has added 391,000 jobs through October this year, the most in the first 10 months since 2002.
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