Canada added 10 times more jobs than expected in October as the government set aside millions to support low-income workers.
Canada’s economy posted a bumper job gain in October, 10 times higher than forecast, with the unemployment rate holding steady, official data showed, with a market spike calling for call another oversized rate hike.
The economy added 108,300 jobs last month, easily beating forecasts of 10,000 new jobs, while the unemployment rate was flat at 5.2%, according to data released on Friday. The remarkable increase was entirely due to full-time employment, spread across both the goods and services sectors.
“It looks like the Governor of the Bank of Canada [Tiff] Macklem zigzags when it should be, judging by these numbers. They are very strong. I was really surprised,” said Derek Holt, vice president of capital markets economics at Scotiabank.
While other data will be released ahead of the next Bank of Canada (BoC) interest rate meeting in December, the increase in employment suggests another 50 basis point increase could be coming. he added.
The BoC raised its policy rate by 50 basis points to 3.75% last week and said while more needs to be raised, it was nearing the end of its tightening campaign.
The jobs report underpins money markets bets on another outperformance in December, with a nearly 70% chance of a 50 basis point increase and the policy rate now peaking at 4.5% early next year .
Average hourly wages for permanent employees rose 5.5% in October compared with the same period last year, up from 5.2% in September. Total employment grew just above the level of May 2022. .
Canada’s core age workers continue to lead the way. The key-age unemployment rate is 4.2%, slightly above July’s record low, but within a historically narrow range last seen in the 1970s.
On Thursday, Prime Minister Justin Trudeau’s government set out billions of dollars in new spending to support low-income workers among other things.
The Canadian dollar traded 1.6% higher at 1.3525 against the greenback, or 73.94 US cents.