Canada’s job market is ‘softening’. What that could mean for interest rates

globalnews.ca:

unemployment rate ticked up to 5.7 per cent in October, up from 5.5 per cent in September. The country added 18,000 jobs in the month, less than the 64,000 positions added in September.Full-time employment fell by 3,300 positions in October, with 20,800 jobs gained in part-time work.Construction and the information, culture and recreation sectors saw gains in October, but that was offset by dropoffs in manufacturing and wholesale and retail trade.Average hourly wages were up 4.8 per cent annually, down slightly from the month before.October marks the fourth time in six months the unemployment rate has risen in Canada, despite employers largely expanding their payrolls since the start of the year.

But the overall labour force has been expanding rapidly, thanks to record immigration levels.While Canada’s economy has added 28,000 positions monthly on average since January, the working age population has grown at an average of 81,000 people per month, StatCan said Friday.The Bank of Canada’s aggressive interest rate hikes have dampened economic growth this year as people and businesses pull back on spending.Economists have been watching for more evidence that this economic softness is spilling over into the labour market.“While the headline job gain was uneventful, make no mistake that the underlying picture for Canada’s labour market is softening,” BMO chief economist Doug Porter said in a note to clients on Friday morning.With Canada’s unemployment rate rising 0.7 percentage points from the start of the year, and signs of easing in wage growth expected to continue, October’s labour report will keep the Bank of Canada “pinned more fully to the sidelines” in its upcoming interest rate decisions.Employers in the U.S. also