To the surprise of most analysts, Canada's employment picture continued to improve in October. Given the whipsaw pattern that employment has traced out over the past couple of years, the consensus expectation was for a small decline in employment for the month after a strong gain in September. Instead, the economy added 43,000 jobs in October, marking the first time that employment has risen in two consecutive months since late 2012. The national unemployment rate fell to 6.5%, its lowest level since the November 2008, when the financial crisis was just starting to bite.
Job gains were seen in the private sector and among the self-employed, with public sector employment falling slightly. The beleaguered manufacturing sector continued to report remarkably volatile employment levels, with the number of jobs rising by 33,000, while resource sector employment fell by more than 20,000. This latter number is unsurprising, given the collapse in global commodity prices in recent months. It remains to be seen whether the fall in the exchange rate will allow the manufacturing sector to continue picking up the slack in the months ahead.
There are worrying elements within the generally improving picture. The labour force participation rate is falling, particularly among younger workers, who still face an unemployment rate in excess of 12 percent. Bank of Canada Governor Stephen Poloz has been severely criticized this week for suggesting that unemployed young people should do volunteer work if they are unable to find paid employment. He noted that this would avoid something that's apparently known as "scarring" on one's resume, which means an unexplained gap between two spells of employment. What two spells of employment would those be, Governor? With the young finding it so hard to find jobs at all, "scarring" might be considered the least of their problems.
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