Canada's job growth slows as recovery sputters

Fri Nov 5, 2010 11:20am EDT
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By Louise Egan

OTTAWA (Reuters) - Canadian employment numbers barely inched higher in October as the sputtering economy created far fewer jobs than forecast, and left expectations intact for interest rates to stay on hold.

About 3,000 people -- a number considered negligible -- found work in the month, according to Statistics Canada data released on Friday. That was not enough to offset the 6,600 jobs lost in September and well below the 15,000 employment gain forecast by analysts in a Reuters poll.

Job gains in recent months have been a fraction of those seen earlier this year. Statscan said the average monthly employment growth was 5,700 in the past four months compared with 51,000 in the first half.

"I think there might be a trace of disappointment on the headline number, but I think on balance this doesn't move the needle in a major way," said Doug Porter, deputy chief economist at BMO Capital Markets.

All the gains were in full-time jobs and private sector hiring outpaced that of the public sector, suggesting the recovery was becoming more entrenched.

The unemployment rate eased to 7.9 percent from 8 percent in September mainly because fewer people were in the labor force actively looking for work.

Other reports on Friday on the construction and housing sectors were mixed. Statscan said building permits soared 15.3 percent in September, largely due to a resurgence in plans for single-family housing.

But the Canadian Real Estate Association issued gloomy forecasts for home resales this year, predicting a decline of 4.9 percent versus its previous estimate of a 1.2 percent decline.   Continued...

<p>People walk down Bay St in the heart of the financial district in downtown Toronto December 7, 2009. REUTERS/Mark Blinch</p>