Canada’sunemployment rate held at 6.5 per cent in October as the economy added 15,000 jobs, Statistics Canada said on Friday.
Analysts had called for the jobless rate to rise to 6.6 per cent and the job market to generate 27,000 positions.
The numbers provide one piece of the puzzle that the Bank of Canada is assembling to decide whether to supersize the next expected interest rate cut with a second trim of 50 basis points (bps) or stick with the standard 25 bps.
An inflation report due Nov. 19 and the next labour report will help the central bank fill in the pieces when it next meets on Dec. 11.
Here’s what economists think the October labour data means for the Bank of Canada and interest rates.
“In October, the increase in employment was still insufficient to stabilize the ongoing deterioration in the labour market,” Matthieu Arseneau and Alexandra Ducharme, economists at National Bank of Canada, said in a note.
The pair estimated the economy needed to add 51,000 net positions, not 15,000, to stop the employment rate from continuing to fall.
As it stands, the measure slipped 0.1 percentage points to 60.6 per cent, the sixth consecutive drop, and is down 1.8 percentage points from its high in 2023, the economists said.
“Although a decline in the employment rate is expected in the context of an aging population, the speed of the recent fall signals a clear cooling in the labour market,” they said.
Given the employment rate slowed for the third straight time in the core 25-54 age group and the youth employment rate remains at lows not seen since 1999, except for the pandemic, Arseneau and Ducharme said there is no reason to celebrate the unemployment rate holding steady.
Furthermore, the Bank of Canada’s Business Outlook
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