State of the labour Market

October Labour Force Survey: Job Growth Stalls, Wages Keep Chugging

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Momentum pauses after a solid third-quarter.

The Labour Force Survey is notorious for its ups and downs. This month’s report was on the weaker side, although not enough to change the larger story. The softer numbers in October were concentrated in many of the areas that showed strength in August and September: employment rates in Ontario and Quebec, and in full-time work. All in all, cooler momentum to start the fourth quarter. Nonetheless, year-over-year employment growth was still up 2.4%, suggesting a solid trend remains intact.

Wages once again stand out in this month’s numbers, with another plus-4% year-over-year increase. Pay growth has been particularly strong in the big-three provinces where conditions have tightened, a sign that employers are making adjustments in a candidate-driven market. That said, the pace is probably a bit exaggerated, partly due to a changing composition of jobs: during the past year, higher-paying occupations have seen a jump in employment, which helps boost the overall average beyond just pay increases for individual roles. The Bank of Canada noted a related trend in its recent Monetary Policy Report, suggesting they’ll be taking the strong pace of wage growth with a grain of salt, at least until more data rolls in.

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