OTTAWA — The Canadian economy churned out another month of job increases that brought the national unemployment rate to a pandemic-era low, even as economists warn that further gains could become increasingly difficult.
The addition of 31,000 jobs last month lowered the unemployment rate to 6.7 per cent, down from 6.9 per cent in September, for the measure’s fifth consecutive monthly decline.
Statistics Canada said the unemployment rate would have been 8.7 per cent in October, down from 8.9 per cent in September, had it included in calculations Canadians who wanted to work but didn’t search for a job.
RBC economists Nathan Janzen and Claire Fan wrote in an analysis that the unemployment rate is still above a longer-run rate of about six per cent, which suggests there are fewer than 200,000 available workers.
That makes filling the almost 900,000 current job vacancies a difficult prospect, said Leah Nord, senior director of workforce strategies for the Canadian Chamber of Commerce. It’s likely to prove much harder than the now-completed recovery of the three million jobs lost at the onset of the pandemic, she said.
“We just want to be done with this and it’s not going to be done,” she said.
“It’s not going to be done for a long time.”
Gains in October were seen across a number of industries, including in the hard-hit retail sector, that pushed the industry back to its pre-pandemic levels for the first time since March.
Offsetting some of the gains were losses in sectors like accommodation and food services that registered a second consecutive monthly decline. TD senior economist Sri Thanabalasingam suggested was that partly linked to renewed restrictions in Alberta. BMO chief economist Douglas Porter said the decline may also signal further hiring headwinds for bars and restaurants.
Statistics Canada reported that half the workers who lost jobs in the industry between August and October returned to the sector, with the remainder switching industries, roughly matching pre-pandemic trends.
Across the labour market, almost seven in 10 unemployed workers who returned to work within 12 months stayed in the same industry, again in line with pre-pandemic trends.
The data suggest no signs of a “great resignation” in Canada, said Behnoush Amery, senior economist with the Labour Market Information Council, but rather more sector-specific issues, particularly in high-contact service industries like accommodation and food services.
“It seems there’s a lot of job churn and adjustments happening in this sector for which we don’t have the full picture yet,” Amery said.
Average wages in the sector have been mostly flat, possibly because employers were watching what would happen to federal aid programs, said Brendon Bernard, senior economist with Indeed.
The federal government aid programs expired in late October, with business aid being narrowed to the hardest-hit firms.
Desjardins chief economist Jimmy Jean said the end of the Canada Recovery Benefit should bring more people into the job market, but cautioned the effects may not instantly appear because many workers have additional savings to rely upon.
“They have the luxury of taking their time to choose the job that they want, or that matches their skills the best,” he said in an interview. “It’s something that’s going to be drawn out, I think, over the next few months.”
The jobs report noted a decline in self-employment in October, but the statistics agency suggested some of those individuals moved to more permanent and in-demand jobs in the professional, scientific and technical services sector.
Kaylie Tiessen, an economist with Unifor, said indicators the union monitors to track precarious work show early signs of declines, such as the number of people working part-time who want full-time work, or those juggling multiple jobs.
If the trends hold, she said, it could further help job seekers.
“For the first time in a while workers are in the driver’s seat here and that means that we have more say over what we need in order to take a particular job,” Tiessen said.
Statistics Canada also said the ranks of Canada’s long-term unemployed, those who have been out of work for six months or more, was little changed in October at almost 380,000.
Mixing with headwinds created by COVID-19 are pre-pandemic issues that have only grown in the background, chief among them an aging workforce.
The number of people 65 and older has increased by 477,000 from October 2019, while the ranks of 15- to 24-year-olds dropped and the core working age population in between those two groups has shown little growth.
Statistics Canada said the demographic shift helped drive down the participation rate to 65.3 per cent in October, which is about 0.3 per cent below pre-pandemic levels.
The agency said the aging workforce could further strain the supply of workers and impede economic growth coming out of the pandemic.
This report by The Canadian Press was first published Nov. 5, 2021.
Jordan Press, The Canadian Press