Canadian Employment (October 2024)

Canada's labour market remains solid in October

• The Canadian labour market gained 14.5k positions in October, with full-time employment up 25.6k and part-time employment down 11.2k. 
• The unemployment rate was unchanged at 6.5% and the participation rate declined 0.1 percentage point to 64.8%.
• Employment by sector showed gains in business, building and other support services (+29k), while losses were seen in finance, insurance, real estate, rental and leasing (-13k) and public administration (-8.7k).
• Lastly, total hours worked jumped 0.3% month-on-month, while wages were up 4.9% year-on-year (from 4.6% in September).             

Key Implications

• Another solid jobs report in October. Job gains were concentrated in full-time positions, with the cyclically sensitive private sector pulling the weight. Employees were working more hours and saw wage growth increase. Not to mention, we are seeing employment for youth starting to bounce back. All told, this report speaks of a labour market that continues to exude decent strength. 
• To cut by 50 bps or 25 bps? That's the question for the Bank of Canada. It recently accelerated the pace of rate cuts, with inflation stabilizing around the 2% target. Yet the labour market hasn't been forcing the BoC's hand. Today's report should encourage the bank to revert back to a 25 bp cut in December (our call), even if it means eating some crow on its one off 50 bp move previously. That said, if it is dead-set on getting its policy rate back into its neutral range (2.25% to 3.25%) by year-end, a 50 bp move would be the choice. Investors are uncertain which way the BoC will go, and given recent rhetoric from the central bank, it too doesn't seems to know which way it will go either.  

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