TORONTO (Reuters) - Canada’s economy gained a net 53,700 jobs in September, entirely in full-time work, Statistics Canada said on Friday. The jobless rate fell to 5.5%.
Employment in the goods producing sector rose by a net 4,300 jobs, mostly in construction. The services sector grew by a net 49,400 positions, mostly in healthcare and social assistance, as well as accommodation and food services.
Market reaction: CAD/
BILL ADAMS, VICE PRESIDENT AND SENIOR ECONOMIST, THE PNC FINANCIAL SERVICES GROUP
“A great headline, especially following an equally impressive headline number in August, but the details were a little weaker. Private sector employment was down on the month and much of the gains in employment are in self-employed Canadians who tend to work fewer hours. You see this reflected in total hours worked, only up 1.3% in year-over-year terms, lagging the gain in employment of 2.4% and a sign that GDP growth is still soft at the end of the third quarter.”
“Net-net, the quality of job gains is not as good as their quality. But with the unemployment rate back down to near the lowest since comparable data began in the 1970s, I think the jobs report argues against a rate cut at the Bank of Canada’s October decision.”
“I would characterize it as relatively positive overall... The unemployment rate fell back and wages came back. The breakdown of jobs was generally good too.”
“The quality of job gains hasn’t necessarily been that great over the past year... Hours worked haven’t really risen in the past year, the work week has actually faded a bit in the past year and wage gains have been pretty modest overall. That, alongside some caution among consumers and heavy debt loads, means it hasn’t really translated into a heavy burst in spending.”
“The big picture here is the job market remains quite strong. The market had been pricing in a very low chance the bank was going to cut rates. This further knocks down those chances from very low levels. And we’ve seen the Canadian dollar strengthen a lot on this report as well.”
“Another month of very strong job growth, we were thinking job gains would slow down after very strong gains in August but apparently not the case with 54,000 jobs added, that was enough to push the unemployment rate back down to 5.5% which is just off a cycle low.”
“For the Bank of Canada, one of those things they were talking about after their last rate decision was a solid starting point for the economy including with a strong labor market. I think this is increasing evidence of that. They have said that they’re watching out for global developments and how they’re going to impact Canada’s economy, so I still think we’ve got some potential for a dovish tone at the end of October, given some further signs of slowing global growth and trade tensions remaining elevated.”
“But more evidence here that the economy has a good degree of resilience, as Deputy Governor Schembri mentioned following the last rate announcement, this gives the economy some welcome resilience to potential negative developments abroad.”
“I think it’s more evidence of that economic resilience that I think has kept them (Bank of Canada) with a fairly neutral tone at the same time as other global central banks have been lowering rates and providing additional accommodation. One of the things the bank said back in September was that they’re going to set monetary policy based on domestic economic conditions and the labor market is saying those conditions are fairly strong.”
Reporting by Moira Warburton, Nichola Saminather and Fergal Smith; Editing by Denny Thomas