Hiring jumps, jobless rate falls

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tavia grant
Globe and Mail Update
Published Friday, Oct. 07, 2011 7:03AM EDT
Last updated Friday, Oct. 07, 2011 8:19AM EDT

The Canadian economy churned out 60,900 jobs last month, quadruple expectations, all in full-time positions.

The country's jobless rate fell two notches to 7.1 per cent – its lowest level since December, 2008, Statistics Canada said Friday.

The report comes after two months of little job growth and is a stark contrast to labour market woes in other countries, particularly the United States. Canada has created 294,000 positions so far this year, mostly in Ontario and Alberta. Full-time employment growth has swelled by 344,000, outweighing a decline in part-time positions.

Still, some details of the monthly report were softer than the headline would suggest. Much of the gains came from a seasonal bounce in educational services. Private sector employment fell while self-employment rose. Manufacturers also shed jobs.

“With economic growth expected to remain soft through year-end, look for employment growth to remain modest as well,” said Robert Kavcic, economist at BMO Nesbitt Burns.

Educational services – which tends to see large swings at this time of year -- rose by 38,000 in September and has increased 1.7 per cent in the past year.

Other industries added to headcount too. Employment in professional, scientific and technical services rose by 36,000, extending a streak that began in the summer of 2009. In the past year, employment in this sector has risen 4.1 per cent – one of the fastest rates of growth of all industries.

Accommodation and food services continued to add positions, while natural resources and public administration also grew.

Employment levels fell in the finance, insurance, real estate and leasing industry, and is down from year-earlier levels. It also declined in manufacturing along with information, culture and recreation.

Gains in public sector and self employment outweighed a drop in the private sector, which fell for a second straight month. That marks the first time since the recession that Canada has seen back-to-back monthly drops in private sector employment, noted Krishen Rangasamy, senior economist at National Bank Financial -- a sign some companies are still cautious about hiring.

Among provinces, British Columbia saw the biggest gains in the country last month, with employment also growing in Saskatchewan and New Brunswick. Employment was little changed in Ontario, Quebec and Alberta.

Core-aged workers were the biggest beneficiary of last month's job growth, and more workers over the age of 55 landed positions too. In the past year, employment among older workers has risen 2.7 per cent compared with 1.2 per cent for people aged 25 to 54.

The youth unemployment rate remained at 14 per cent, the highest of any demographic group.

Economists polled by Bloomberg had expected 15,000 new jobs last month with the unemployment rate staying put at 7.3 per cent.