Canada job market stalls in October after hefty gains

Fri Nov 2, 2012 11:44am EDT
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By David Ljunggren

OTTAWA (Reuters) - Canadian job growth stalled in October after two months of strong hiring, Statistics Canada data showed on Friday, confirming expectations employment gains would ease to reflect sluggish economic growth.

The economy added 1,800 jobs in the month, even lower than the small increase of 5,000 jobs forecast in a Reuters poll, while the unemployment rate held steady at 7.4 percent.

Economists have argued that with the economy expanding at a rate of about 2 percent, employment growth of the magnitude seen in the previous two months was not sustainable.

"It's not too surprising to find the Canadian labor market take a bit of a breather. The underlying details are still fairly positive," said David Tulk, chief Canada macro strategist at TD Securities.

"It's consistent with growth slowing into the third quarter and then recovering slowly thereafter."

The Bank of Canada last week slashed its forecast for third-quarter growth on an annualized basis to 1 percent from 2 percent, citing a greater degree of slack in the economy.

The country created 52,100 jobs in September and 34,300 in August. Due to the volatility of the data from month to month, many analysts prefer to look at three- or six-month moving averages, which show monthly gains of 29,400 and 12,100, respectively.

Finance Minister Jim Flaherty said that although the numbers were modest, he was pleased to see the economy creating jobs.   Continued...

A man looks at a job board posted at a job fair in Toronto, April 1, 2009. REUTERS/Mark Blinch