Canada's unemployment rate rises to 5.7% in October as economy sees modest job gain - The Globe and Mail | Canada News Media
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Canada's unemployment rate rises to 5.7% in October as economy sees modest job gain – The Globe and Mail

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A construction worker walking on King St. West in Toronto on Mar. 14.Fred Lum/the Globe and Mail

The Canadian economy added jobs at a slower pace in October and the unemployment rate ticked up, the latest sign of how higher interest rates are weighing on economic activity.

The labour market added 17,500 jobs last month, after increases of nearly 64,000 positions in September and 40,000 in August, Statistics Canada said Friday in a report. Analysts on Bay Street were expecting a gain of 25,000 in October.

Despite the increase, the unemployment rate rose to 5.7 per cent from 5.5 per cent, the highest level since January, 2022. The labour force is expanding quickly, because of an immigration boom, but employers are not creating enough jobs to keep the jobless rate from rising.

Meanwhile, average hourly wages rose 4.8 per cent on an annual basis in October – down from a 5-per-cent pace in September. This is an encouraging sign for the Bank of Canada, which has repeatedly flagged elevated wage growth as a risk to the inflation outlook.

The economic data have softened in recent months: Gross domestic product has stagnated, job vacancies are falling and consumers are pulling back on purchases as businesses and households contend with the highest borrowing rates in more than two decades.

After Friday’s report, analysts said the Bank of Canada was unlikely to raise its benchmark interest rate any further from its current 5 per cent.

“While the headline job gain was uneventful, make no mistake that the underlying picture for Canada’s labour market is softening. Exhibit A on that front is the grinding rise in the unemployment rate,” Bank of Montreal chief economist Doug Porter wrote to clients.

He added: “This will keep the Bank of Canada pinned more fully to the sidelines, although we still believe that rate relief remains a distant prospect.”

The labour report showed mixed results by region and industry. Alberta added 37,700 positions in October, the most of any province. At the other end, employment fell by 22,100 in Quebec and 14,300 in Ontario. Because of the weakness in Quebec, Saskatchewan now has the lowest unemployment in the country at 4.4 per cent.

Employment rose by 23,000 in construction, the most by industry. Manufacturing shed 18,800 roles, while another 21,700 positions were lost in wholesale and retail trade.

After hitting a record low of 4.9 per cent last year, the unemployment rate has been moving higher. Statscan noted there were 1.2 million unemployed persons in October, an increase of 171,000 since April. The agency noted that among those unemployed in September, 60 per cent remained unemployed in October, a greater proportion than a year ago.

This is “an indication that job seekers are facing more difficulties finding employment than a year ago,” the report said.

In October, one in three Canadians aged 15 and older was living in a household that found it difficult or very difficult to meet its financial needs for necessary expenses over the previous four weeks, Statscan said on Friday. This proportion was down slightly from a year ago (35.5 per cent), but was much higher than three years ago (20.4 per cent).

The annual inflation rate has ebbed to 3.8 per cent from a peak of 8.1 per cent last year. Still, the Bank of Canada doesn’t expect inflation to return to its 2-per-cent target until mid-2025. Moreover, price increases remain elevated for necessities such as food and shelter.

From a labour perspective, the coming months could be challenging for job seekers.

“We suspect that given the weak trend in economic activity currently and its implications for labour demand, job growth will continue to lag that of the overall population for the remainder of this year and into 2024,” said Andrew Grantham, senior economist at CIBC Capital Markets, in a report.

Mr. Grantham said the unemployment rate could rise further and peak somewhere between 6 per cent and 6.5 per cent. “That should help to ease wage and overall inflationary pressures, allowing for interest rate cuts to start” in the second quarter of 2024, he said.

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Carry On Canadian Business. Carry On!

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11 hours ago

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October 22, 2024

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Human Resources Officers must be very busy these days what with the general turnover of employees in our retail and business sectors. It is hard enough to find skilled people let alone potential employees willing to be trained. Then after the training, a few weeks go by then they come to you and ask for a raise. You refuse as there simply is no excess money in the budget and away they fly to wherever they come from, trained but not willing to put in the time to achieve that wanted raise.

I have had potentials come in and we give them a test to see if they do indeed know how to weld, polish or work with wood. 2-10 we hire, and one of those is gone in a week or two. Ask that they want overtime, and their laughter leaving the building is loud and unsettling. Housing starts are doing well but way behind because those trades needed to finish a project simply don’t come to the site, with delay after delay. Some people’s attitudes are just too funny. A recent graduate from a Ivy League university came in for an interview. The position was mid-management potential, but when we told them a three month period was needed and then they would make the big bucks they disappeared as fast as they arrived.

Government agencies are really no help, sending us people unsuited or unwilling to carry out the jobs we offer. Handing money over to staffing firms whose referrals are weak and ineffectual. Perhaps with the Fall and Winter upon us, these folks will have to find work and stop playing on the golf course or cottaging away. Tried to hire new arrivals in Canada but it is truly difficult to find someone who has a real identity card and is approved to live and work here. Who do we hire? Several years ago my father’s firm was rocking and rolling with all sorts of work. It was a summer day when the immigration officers arrived and 30+ employees hit the bricks almost immediately. The investigation that followed had threats of fines thrown at us by the officials. Good thing we kept excellent records, photos and digital copies. We had to prove the illegal documents given to us were as good as the real McCoy.

Restauranteurs, builders, manufacturers, finishers, trades-based firms, and warehousing are all suspect in hiring illegals, yet that becomes secondary as Toronto increases its minimum wage again bringing our payroll up another $120,000. Survival in Canada’s financial and business sectors is questionable for many. Good luck Chuck!. at least your carbon tax refund check should be arriving soon.

Steven Kaszab
Bradford, Ontario
skaszab@yahoo.ca

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Imperial to cut prices in NWT community after low river prevented resupply by barges

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15 hours ago

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October 22, 2024

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NORMAN WELLS, N.W.T. – Imperial Oil says it will temporarily reduce its fuel prices in a Northwest Territories community that has seen costs skyrocket due to low water on the Mackenzie River forcing the cancellation of the summer barge resupply season.

Imperial says in a Facebook post it will cut the air transportation portion that’s included in its wholesale price in Norman Wells for diesel fuel, or heating oil, from $3.38 per litre to $1.69 per litre, starting Tuesday.

The air transportation increase, it further states, will be implemented over a longer period.

It says Imperial is closely monitoring how much fuel needs to be airlifted to the Norman Wells area to prevent runouts until the winter road season begins and supplies can be replenished.

Gasoline and heating fuel prices approached $5 a litre at the start of this month.

Norman Wells’ town council declared a local emergency on humanitarian grounds last week as some of its 700 residents said they were facing monthly fuel bills coming to more than $5,000.

“The wholesale price increase that Imperial has applied is strictly to cover the air transportation costs. There is no Imperial profit margin included on the wholesale price. Imperial does not set prices at the retail level,” Imperial’s statement on Monday said.

The statement further said Imperial is working closely with the Northwest Territories government on ways to help residents in the near term.

“Imperial Oil’s decision to lower the price of home heating fuel offers immediate relief to residents facing financial pressures. This step reflects a swift response by Imperial Oil to discussions with the GNWT and will help ease short-term financial burdens on residents,” Caroline Wawzonek, Deputy Premier and Minister of Finance and Infrastructure, said in a news release Monday.

Wawzonek also noted the Territories government has supported the community with implementation of a fund supporting businesses and communities impacted by barge cancellations. She said there have also been increases to the Senior Home Heating Subsidy in Norman Wells, and continued support for heating costs for eligible Income Assistance recipients.

Additionally, she said the government has donated $150,000 to the Norman Wells food bank.

In its declaration of a state of emergency, the town said the mayor and council recognized the recent hike in fuel prices has strained household budgets, raised transportation costs, and affected local businesses.

It added that for the next three months, water and sewer service fees will be waived for all residents and businesses.

This report by The Canadian Press was first published Oct. 21, 2024.

The Canadian Press. All rights reserved.

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U.S. vote has Canadian business leaders worried about protectionist policies: KPMG

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15 hours ago

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October 22, 2024

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TORONTO – A new report says many Canadian business leaders are worried about economic uncertainties related to the looming U.S. election.

The survey by KPMG in Canada of 735 small- and medium-sized businesses says 87 per cent fear the Canadian economy could become “collateral damage” from American protectionist policies that lead to less favourable trade deals and increased tariffs

It says that due to those concerns, 85 per cent of business leaders in Canada polled are reviewing their business strategies to prepare for a change in leadership.

The concerns are primarily being felt by larger Canadian companies and sectors that are highly integrated with the U.S. economy, such as manufacturing, automotive, transportation and warehousing, energy and natural resources, as well as technology, media and telecommunications.

Shaira Nanji, a KPMG Law partner in its tax practice, says the prospect of further changes to economic and trade policies in the U.S. means some Canadian firms will need to look for ways to mitigate added costs and take advantage of potential trade relief provisions to remain competitive.

Both presidential candidates have campaigned on protectionist policies that could cause uncertainty for Canadian trade, and whoever takes the White House will be in charge during the review of the United States-Mexico-Canada Agreement in 2026.

This report by The Canadian Press was first published Oct. 22, 2024.

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