The Canadian economy remained resilient in September, adding 64,000 jobs as the unemployment rate was unchanged at 5.5%, according to data released Friday by Statistics Canada.
There were two reasons that the unemployment rate stayed the same despite the job gains: population growth and a slowdown in hiring.
The increase in jobs was offset by the number of people entering the workforce, primarily through immigration.
The increase in jobs was offset by the number of people entering the workforce, primarily through immigration. This was reflected in the rise in part-time employment; newcomers might not find full-time work right away.
But while employers have slowed down on hiring, they are also holding onto their workers, and there have been no widespread layoffs.
To keep the unemployment rate constant, the economy needs to add about 50,000 jobs a month given the immigration-driven population growth.
September’s numbers are on track to achieve this and are representative of a more balanced job market where employers can find talent when needed.
Even as the job market has cooled, though, labour demand remains solid and wage growth has stayed above inflation. The strikes and labour disputes this year have shown that some workers are still demanding raises and getting them.
The Bank of Canada expressed concerns this week that companies might keep raising prices to maintain margins while accounting for wage growth.
Continued upward price pressures remain a threat. Still, no further rate hikes are expected as the economy cools while workers remain employed: the telltale signs of a soft landing.
The data
The services sector was entirely responsible for the increase in jobs with 74,300 additional positions while the goods-producing sector lost 10,500.
Educational services led the increase with 65,800 jobs, which more than fully offset August’s decline.
Construction had 17,500 fewer jobs, with the employment rate falling by 3.4% since January.
Read more of RSM Canada’s insights on the economy and the middle market,
The slowdown in construction is unsurprising given high interest rates, but it will worsen the nationwide housing shortage in the upcoming years as fewer workers mean fewer completed projects.
Employment rose among core-aged women (37,000) and men (32,000), bringing the employment rate to 81.8% among core-aged women and 87.9% among core-aged men.
As a result, the labour force participation rate among core-aged men rose to 92.4% and to 85.6% among core-aged women, a high level for both groups compared to the past few decades. The data for women is just below the historical high set earlier this year.
While the job market is not as tight as a year ago, most core-aged men and women are already in the workforce and employed.
