Employment rose by 64,000 in September: Statistics Canada

Employment rose by 64,000 (+0.3%) in September, following an increase of 40,000 (+0.2%) in August, reported Statistics Canada on Friday.

Alena Shekhovtcova

“The employment rate—the proportion of the population aged 15 and older who are employed—rose 0.1 percentage points to 62.0%, offsetting a decline in the previous month,” said the federal agency.

“The unemployment rate was unchanged in September and stood at 5.5% for the third consecutive month.

“Employment increased among core-aged (aged 25 to 54 years) women (+37,000; +0.6%) and men (+32,000; +0.5%), while it was little changed for youth aged 15 to 24 and people aged 55 and older. There were more people employed in educational services (+66,000; +4.5%), offsetting a decrease of 44,000 (-2.9%) in August. Employment in transportation and warehousing also increased (+19,000; +1.8%), while there were fewer people employed in finance, insurance, real estate, rental and leasing (-20,000; -1.4%), construction (-18,000; -1.1%) and information, culture and recreation (-12,000; -1.4%).”

StatsCan said employment increased in six provinces in September, led by Quebec (+39,000; +0.9%) and British Columbia (+26,000; +0.9%). Employment declined in Alberta (-38,000; -1.5%) and New Brunswick (-2,700; -0.7%).

“Employment growth in September was concentrated in part-time work, which rose by 48,000 (+1.3%). Since the beginning of the year, growth in part-time work (+1.9%) has outpaced growth in full-time work (+1.0%),” said the report.

“The number of self-employed workers rose by 26,000 (+1.0%) in September, following an increase of 50,000 (+1.9%) in August. From July to September, the number of self-employed men increased by 55,000, accounting for 72.6% of the increase over this period. The share of workers who were self-employed was 13.2% in September, up from July (12.9%), but little changed from January (13.3%) and below the pre-pandemic share recorded in February 2020 (14.6%). Self-employment has remained flat since its decline following the onset of the pandemic. In the months from March 2020 to July 2023, the number of self-employed people increased just four times and as of September 2023, it remained below its February 2020 level (-124,000; -4.4%).”

“Today’s headline print was double the trend pace over 2023, boosted by Canada’s continued population boom (+82k m/m in population) and a surge of workers entering the job market (+72k m/m). While the headline figures will be grabbing most of the attention, we’d caution on getting too excited. Almost all the gains were in the historically volatile Education sector. And when looking at cyclically driven private sector firms, hiring only increased by 1k this month. Furthermore, most of the job gains were in part-time employment, causing the number of hours worked to decline. These details should throw some cold water on a seemingly hot jobs report,” he said.”The Bank of Canada has been looking for evidence that past rate hikes are starting to bite. Today’s employment report muddies the outlook. Financial markets are cementing pricing for another 25bps rate hike in the coming months, causing the Canada 2-year yield to surge over 15bps this morning. There will be a lot more data coming out between now and the next BoC rate decision (CPI, housing, retail sales) and the Bank will likely need to see significant weakness in these reports to prevent it from pulling the trigger on another hike.”

Douglas Porter, Chief Economist with BMO Economics, said there is little debate that the gaudy headline job growth overstates the strength of the labour market, juiced by a seasonal spike in education jobs and by surging part-time employment.

“Still, the fact that overall employment is up 2.8% in the past year and average wages are rising 5.0% y/y means that labour income is still powering ahead. In turn, that suggests that the economy is not seriously buckling, yet. We don’t believe this is enough to tip the scales for the Bank of Canada, but it will keep their tightening bias firmly in place,” he said.

CPA Canada (Chartered Professional Accountants of Canada) Chief Economist David-Alexandre Brassard said “the September print painted a nuanced portrait of the labour market in Canada.”

“On one hand, we see resilience: the county is adding jobs and the unemployment rate has not moved. Wage pressures are still high and remain a concern amid attempts to tame inflation. However, the decline of private sector jobs in Q3 could signal a slowing economy, especially in a labour-constrained environment. Additionally, the quality of added jobs is questionable, with part-time jobs accounting for half of the job growth in Q3,” he said.

The Conference Board of Canada said September marks the end of a third quarter in which the labour market added 100,000 jobs, roughly half the number added in the first quarter of the year. Firms are responding by reducing hiring activity.

“Although an increase in employment this month may appear to show labour market on a strong footing, the results should be interpreted with caution, given the wider context of strong population growth,” it said.

“While international migration is critical, it is not a silver bullet. Inflows of young and core-aged migrants can help reduce the old age dependency for now, but the day will come when they too grow old and retire.”

Mario Toneguzzi

Mario Toneguzzi is Managing Editor of Canada’s Podcast. He has more than 40 years of experience as a daily newspaper writer, columnist, and editor. He was named in 2021 as one of the Top 10 Business Journalists in the World by PR News – the only Canadian to make the list)