Canada's labour market is drifting like the economy, with just 3,000 new jobs produced last month, the second month in a row of little hiring.
Although the jobless rate declined one notch, to 7.9 per cent, that stemmed more from discouraged men leaving the labour force than any pick-up in hiring. The rate has remained around the 8-per-cent mark for the past seven months.
For now, Canadian employers remain in a holding pattern. While the labour market created 375,000 jobs in the past year, most of that strength happened in the first half of this year, Statistics Canada said Friday. Job growth that averaged 51,000 positions a month in the first half has ebbed to just 5,700 monthly jobs since June.
"The labour market really hasn't done anything in the past four months," said Philip Cross, Statscan's chief economic analyst. Among regions, Alberta is leading the hiring thanks to the oil sands while Ontario employment has fallen 0.5 per cent since June, he added. Job growth hasn't budged in the rest of the provinces.
Without Alberta's minor hiring boom last month, Canada would have shed 14,000 jobs, noted Desjardins Group senior economist Benoît Durocher.
The country's municipal jobless rates also show a sag in the centre. Some cities, including Toronto, Sudbury, Windsor and Trois-Rivières, are stuck at 9 per cent or higher. Regina, Victoria and Quebec City have the nation's lowest jobless rates, around 5 per cent.
Yet silver linings lie beneath the numbers. Last month's gains were fuelled by full-time increases, with full-time gains outweighing part-time losses for three months in a row. The private sector has added to payrolls for two straight months. Paid jobs are increasing while self-employment is easing. Alberta is hiring, and so is the construction sector.
Most importantly for business confidence, American employers added to their head count for the first time since May.
"We're very conscious of the dependency we have on the U.S. … and if we start hearing good news about what's happening there, that will play out in Canada as well," said Pedro Antunes, director of national forecasting at the Conference Board of Canada.
While Canada is in "good shape" overall, he see declines in construction and the public sector in the coming months, which will keep the jobless rate elevated. He sees the unemployment rate averaging 7.4 per cent next year, and doesn't expect it to return to pre-recession levels of about 6 per cent until 2015.
Moderate job growth and weak U.S. demand mean the Bank of Canada will likely refrain from raising interest rates in the coming months, said Dawn Desjardins, assistant chief economist at Royal Bank of Canada.
Still, just because the labour market has fallen into a four-month funk doesn't mean it's tipping into prolonged weakness, Statscan's Mr. Cross said. A look through historical patterns shows "it's just as likely to pop back up as to slow down. And in fact, it more often pops up."
Tavia Grant