Canada’s economy continued its gradual recovery as the unemployment rate fell to 6.7% in October, the fifth month of decline in a row, according to data released Friday by Statistics Canada.
Canada added 31,200 jobs on the month, little changed from the previous month and a signal that the economy is heading toward equilibrium in a post-pandemic world.
The services-producing sector added 37,500 jobs, overcompensating for the goods-producing sector, which lost 6,200 jobs from September.
The shift in sectors was remarkable. The wholesale and retail trade added a stunning 80,500 jobs, and information, culture and recreation added 15,100 jobs, bringing both sectors to above their pre-pandemic levels. These are signs that Canada is overcoming the pandemic and arriving at a new normal.
In contrast, the professional, scientific and technical services sectors had its first modest decrease after 15 months of vigorous growth.
Also notable was that fewer people left their jobs. Full-time employment for core-aged men reached pre-pandemic levels, while there are more core-aged women working full-time now than in February 2020. Clearly, Canadians are eager to return to work.
The labor force participation rate dropped to 65.3%, down by 0.2% from September, largely because of retirements among older workers.
Additionally, with global vaccination rates rising and international travel restrictions easing, more immigrants arrived in October than in any month during the pandemic. We can expect increasing immigration in the upcoming months, which will help add supply to the tight labor market.
Still, businesses will encounter challenges given the aging workforce and in competing with the departure of knowledge workers to the United States. Perks like high wages and flexible work options will help attract and retain talent.
Multiple indicators in Canada’s labor market hit or surpassed pre-pandemic levels in October, including employment for core-aged men and women, and employment in trade, culture and recreation.
With pandemic federal support ending, we will continue to see the labor market heading toward the new normal, with Canadians settling into jobs in sectors that have flexible work arrangements like professional services.