October 26, 2012 / 6:58 PM / in 5 years

Modest Canadian job gains eyed for October

TORONTO (Reuters) - Canada likely added very few jobs in October after bumper back-to-back gains in the two prior months, with a more accurate picture of modest hiring expected to emerge when employment data is released on Friday, a Reuters poll showed.

The economy is expected to have added just 5,000 new jobs in the month, after a thumping 52,100 additions in September, the median forecast of 24 economists showed. The unemployment rate is seen steady at 7.4 percent.

The most optimistic forecaster saw 20,000 jobs being created, while the most pessimistic predicted a loss of 30,000 positions.

“It’s always an issue of whether your call for the upcoming month is an offset to an outsized move the previous month or whether we get back to trend of underlying monthly increase,” said Paul Ferley, assistant chief economist at Royal Bank of Canada, who predicted a gain of 5,000.

“In the case of October, the September gain of 52,000 just seems outsized given underlying growth in the economy.”

The country added 52,100 jobs in September and 34,300 in August, both surprisingly strong numbers given global uncertainty.

Ferley said employment growth in the country’s goods sector likely moderated while services notched a decline as consumers hampered by high personal debt levels limit their spending.

“Overall we’re talking about modest growth,” he said.

Economists at Bank of Montreal also said they were not looking for recent outsized gains to continue in October, adding that they’d be taking particular interest in readings for the manufacturing and construction industries.

“A clear indication that the job market is not as hale and hearty as the recent employment gains would suggest is the fact that the unemployment rate has drifted higher in recent months,” they wrote in a research note.

Polling by Teresa Ruiz; Editing by Jeffrey Hodgson and Chizu Nomiyama

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