Canadian jobs slows as shutdowns bite, but analysts see signs of resilience

Canada added fewer jobs than expected in October as coronavirus-related shutdowns started to bite but analysts said the gain reflected welcome signs of resilience in the economy.

Statistics Canada on Friday reported 83,600 new jobs and said the unemployment rate had dipped to 8.9%. Analysts in a Reuters poll had predicted a gain of 100,000 jobs and for the unemployment rate to fall to 8.8% from 9.0%.

Statscan compiled the data during the week of October 11-17, by which point major provinces such as Ontario and Quebec had started imposing new restrictions on restaurants, bars and recreational facilities.

Andrew Kelvin, chief Canada strategist at TD Securities, said the economy had maintained some momentum in October after massive gains in previous months.

“Some deceleration was inevitable. I think this should be viewed as an encouraging sign of the economy’s resilience,” he said by phone.

The accommodation and food services sector shed 48,200 jobs, easily the largest loss of any single sector. Wholesale and retail trade added 45,300 jobs.

Full-time employment rose by 69,100 jobs while part-time employment was up by 14,500 positions.

The data will have little impact at the Bank of Canada, which says interest rates are set to stay at record lows until some time in 2023.

“The low-hanging fruit has been picked in terms of Canada’s job recovery and we’re transitioning to a much cooler environment. But we’re still on the positive side of the ledger so far,” said Derek Holt, vice president of capital markets economics at Scotiabank.

The Canadian dollar steadied at around 1.3060 to the U.S. dollar, 76.57 U.S., about down 0.1% on the day.