A help wanted sign hangs in a bar window along Queen Street West in Toronto Ontario, Canada June 10, 2022. REUTERS/Carlos Osorio/File Photo Acquire Licensing Rights
OTTAWA, Nov 3 (Reuters) – The Canadian economy added fewer jobs than expected in October and the jobless rate rose to a 21-month high of 5.7%, data showed on Friday, further evidence the economy has stalled and that the central bank may not need to raise rates again.
Canada added a net 17,500 jobs in October, Statistics Canada data showed. Analysts polled by Reuters had forecast a net gain of 22,500 jobs and for the unemployment rate to tick up to 5.6% from 5.5% in September.
The average hourly wage for permanent employees – a figure closely watched by the central bank – rose 5.0% from a year earlier, down from the 5.3% in September.
“In line with the more pronounced cooling in hiring, the annual pace of wage growth for permanent employees slowed three ticks to 5.0%,” said Royce Mendes, head of macro strategy at Desjardins.
“While that’s still inconsistent with the Bank of Canada’s 2% inflation target, monetary policymakers will take the deceleration as a sign that their medicine is working,” he said.
The Bank of Canada (BoC) held rates at a 22-year-high of 5.0% last month after having raised them 10 times between March of last year and July to try to bring inflation back to its 2% target. Annual inflation was 3.8% in September.
The softer-than-anticipated jobs report follows data out earlier this week indicating that the economy likely slipped into a shallow recession in the third quarter.
Separately on Friday, data from S&P Global showed contraction in Canada’s service sector deepened in
