We know that employers are cautious, and that the economy slowed. Yet, amid a tough trade environment, Canada just recorded another month of stronger-than-expected job gains.

Employment in Canada rose 67,000 in October, building off a similar gain in September and fully reversing a summer of job losses. That said, not all the details were rosy, as last month’s improvement was driven entirely by part-time positions.

The job gain was large enough to nudge down the jobless rate from 7.1% to 6.9%. We’re even seeing some relief on the youth side, as youth unemployment has cooled to 14.1% from 14.7% in September.  The Jays World Series run may have even had an impact, as Ontario job gains were concentrated in information, culture and recreation as well as accommodation and food.  

In Alberta, one may have expected a setback after the largest one-month job gain on record (outside the pandemic recovery) in September. Instead, employment rose 10,300, bringing employment growth since January to 47,500. Consistent with the national pattern, all the job gains were part-time last month. Year-over-year, Alberta leads all provinces with 3.9% employment growth (vs. 1.4% nationally).

The Alberta teachers’ strike had a material impact on hours worked. Job numbers are far less impacted, as striking workers are still counted as employed in the survey (though there was a 11,600 loss in education services employment for the month).

According to Stats Can, “an estimated 87,000 employees across the provinces lost work hours due to labour disputes during this period (not seasonally adjusted). This was particularly notable in Alberta where a teachers' strike, and a subsequent lock-out, led to the closure of most elementary and secondary schools in the province.” Hours worked in Alberta dipped 9.6% last month over September, though a large part of this is due to normal seasonal patterns. Controlling for seasonal fluctuations, we estimate a 2-3% decline.

Recall that Alberta’s labour market needs to churn out jobs faster than other provinces to keep pace with its fast-growing population. That’s been tough to do given the population surge the last three years. However, the September and October job gains have put a dent in the unemployment rate (7.8% in September and October vs. 8.4% in August). That said, the unemployment rate in Alberta still remains elevated, ranking 4th highest among provinces, despite much sturdier job growth.

As we’ve noted, it's a tough labour market for youth, but even that category has come off its peak. The youth unemployment rate was 14.9%, up slightly from September, but  down from the recent peak of 20.3% in July.

Our conclusion? Last month, we warned not to get carried away by the Alberta job spike. This is a notoriously volatile survey, and we noted that part of this job gain could get easily reversed. The fact we got another gain in October makes things interesting. Employment is tracking above our September forecast (2.0% vs. 2.7% year-to-date). While that forecast built in some improvement, we are now going back to the drawing board ahead of our December forecast and will be nudging up our employment forecast for both 2025 and 2026. Still, we are still in the middle of the trade storm with no immediate relief in sight. Our expectation is that employment will start to level off and we wouldn’t rule out declines in the remaining two months.

Implications for the Bank of Canada - Not much. We weren't expecting them to cut in December, and this report reinforces that call.

The trivia section will be in The Seven coming out later today.