Ontario Construction News staff writer
While the construction industry dropped 18,000 jobs (1.1 per cent) last month, the Canadian economy added more jobs than expected. However, economists are warning the job market is weaker than it looks.
Statistics Canada released its September labour force survey Friday morning, which shows employment rose by 64,000 jobs and the unemployment rate holding steady at 5.5 per cent. 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%).
“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,” said TD director of economics James Orlando in a client note.
“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.”
Jobs were shed in construction, finance, insurance, real estate rental and leasing, information and recreation and Canada’s job vacancies have fallen and the unemployment rate has edged up.
“Around a year ago, I would say that conventional wisdom turned to the view that the economy was going to go through at least a mild downturn, if not something a bit more serious than that. And I would say overall, things have held up better than expected,” said Douglas Porter, BMO’s chief economist.
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%).
Average hourly wages in September were up five per cent from a year ago and strong population growth has also been supporting larger monthly job gains, as more people enter the labour force.
The Bank of Canada has stressed that the tight labour market is a symptom of an “overheated” economy, where demand for goods and services is outpacing supply.
Last month, the central bank opted to hold its interest rate steady after data showed the economy shrank in the second quarter. But it kept the door open to more rate hikes, depending on how inflation and the economy evolve.
It’s set to make its next interest rate decision on Oct. 25.