Market performance was underlined by increasingly robust economic fundamentals
Canadian employment saw 31,200 new jobs in October, which was the latest in a series of solid monthly gains that has ultimately pushed labour force participation back to pre-pandemic levels, according to BMO.
In its latest market analysis, BMO said that this monthly increase is impressive considering that the public administration sector shed 8,000 jobs in October, defying its usual trend of adding roughly that many positions in any given month.
“In many ways, this is the most ‘normal’ employment report we have seen since the pandemic began, with job gains roughly in line with the 2019 trend (of just under 30,000), the jobless rate dipping two ticks to its pandemic low of 6.7%, and wages creeping back to roughly normal at +2.0% year over year,” said Douglas Porter, chief economist and managing director (economics) at BMO.
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By sector, retail and wholesale had the most gains with 80,500 new jobs, making up for the loss of 27,000 posts in the hotel and restaurant industries. Construction increased by 4,300 jobs, which was offset by a decrease of 8,700 in goods-producing sectors. Agriculture ticked up by 2,500 new jobs, although it remains the weakest sector so far in 2021.
By geographical distribution, only five of 10 provinces showed job gains last month, with the greatest increases seen in Ontario (up 37,000) and British Columbia (up 10,000). The worst losses were seen in the provinces most challenged by the fourth wave and the ensuing restrictions: Saskatchewan (down 6,500) and Alberta (down 9,000).
These trends will not likely have a significant impact on the Bank of Canada’s rate hike timings, BMO said.
“Given the wildness of the prior 18 months, no-one is complaining about ho-hum,” Porter said. “Underlying job growth remains solid, wages are firming (but not running hot), hours worked are growing strongly again, and the jobless rate is now within one percentage point of pre-pandemic levels.”
