Canada lost 68,000 jobs in September and the unemployment rate rose to 6.5%, according to Reuters, CBC, BNN Bloomberg, The Globe and Mail, Radio-Canada, La Presse and the Financial Post. Reuters called the drop a surprise and said the jobless rate inched up. Quebec lost 49,000 jobs, TVA Nouvelles and Le Journal de Montréal reported, and the Telegraph-Journal said unemployment in New Brunswick rose again. Bloomberg said the Canadian dollar weakened as the soft data dimmed rate-hike bets, and FinancialJuice, citing swap data, said the odds of an October hike fell to 27% from 40%. The TSX closed up 1.48% at 35,664.62 and USD/CAD finished at 1.4254, per DailyDrop's quote feed. We did not see the detail by industry, age or wages.
The labour market is the Bank of Canada's main worry besides inflation. Two weak readings in a row, which the Globe and Mail and La Presse headlines imply, shift the question from how high rates may go to whether they should rise at all. A single month is noisy, though, and the survey is a sample.
If you renew a mortgage or carry a variable-rate loan, weaker jobs data lowers the odds of higher rates in the near term but does not guarantee relief. If you work in Quebec, the provincial figure is the one to watch. Job seekers should expect slower hiring.
One month of losses, led by a single province, is a poor basis for panic, and the TSX's jump shows investors see it as a reason for easier policy rather than a collapse.
Losses on this scale with unemployment at 6.5% show the economy is stalling, and an aging population and low immigration, which the Bank of Canada says are reshaping the economy, limit how fast it can recover.
Watch two numbers: the October reading and the Bank of Canada's next statement. Until then, treat the 27% hike probability as one data vendor's estimate, and remember that Quebec's 49,000 is most of the national story.
Reuters · CBC · The Globe and Mail · Radio-Canada · La Presse · BNN Bloomberg · Financial Post · Bloomberg · FinancialJuice · DailyDrop quote feed (Oct. 9-10).
Canada lost 68,000 jobs in September and unemployment rose to 6.5%. Traders trimmed bets on a Bank of Canada rate hike
Quebec accounted for 49,000 of the losses. The loonie slipped, yet the TSX still jumped 1.5% on Friday.
The Canadian economy shed 68,000 jobs in September and the unemployment rate rose to 6.5%, according to reports on Friday's Labour Force Survey from Reuters, CBC, BNN Bloomberg, The Globe and Mail, Radio-Canada, La Presse and the Financial Post. Reuters called the contraction a surprise and said the jobless rate inched up. The Globe and Mail and La Presse both used the word "again" in their headlines, which points to earlier weakness; we did not verify the figures for previous months. We also did not see the report's detail on industries, age groups or wages, so we cannot say where outside Quebec the losses fell. The survey is a sample of households, so a monthly change carries a margin of error, and economists often look at several months together before calling a trend.
The provinces were uneven. TVA Nouvelles and Le Journal de Montréal reported that Quebec lost 49,000 jobs, which would be roughly three-quarters of the national drop and gives the incoming Parti Québécois government, which won the Oct. 5 election, a weaker labour market than the one it campaigned in (we saw no PQ reaction), Elsewhere, the Telegraph-Journal said unemployment in New Brunswick rose again. Markets read the report as a reason to doubt higher borrowing costs. Bloomberg's headline said the Canadian dollar weakened as soft jobs data dimmed bets on higher rates, and FinancialJuice, citing swap market data, said the odds of a Bank of Canada rate hike in October fell to 27% from 40%. That percentage comes from one source, so treat it as indicative. The loonie closed near 70.2 US cents, with USD/CAD at 1.4254, up 0.2%, in DailyDrop's quote feed. Stocks went the other way: the S&P/TSX Composite Index closed up 1.48% at 35,664.62, a gain of more than 500 points, Yahoo Finance Canada reported, as U.S. markets also rose. The outlets we read did not explain the size of the move; one plausible reading is that investors saw the data as lowering the odds of higher rates, not as the start of a deeper downturn, but that is our inference. Global News separately reported that the Bank of Canada says an aging population and low immigration are "reshaping" the economy; we saw only the headline, not the remarks. Ottawa's own Friday messaging pointed to business investment: ministers Metlege Diab and Lightbound promoted the new Productivity Mega Deduction in separate releases, which the government says will help firms invest, grow and create jobs. Another release said Ottawa is helping Saskatchewan businesses adapt amid what it called unjustified U.S. tariffs, and Minister Sidhu is to lead a Team Canada trade mission to India. The headlines of those releases did not mention the jobs figures. Monday is Thanksgiving Day, so the TSX is closed and the next full read on the market comes on Tuesday.