Hiring, wages up sharply in September after sluggish summer: Statscan

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Statistics Canada's latest survey of employers shows a sharp jump in both hiring and wages in September, as the Canadian labour market bounced back from summer doldrums.

The statistical agency's monthly Survey of Employment, Payrolls and Hours (SEPH) showed that businesses added 30,700 jobs in September, recovering almost all of the 34,100 positions shed in August. (The August decline was revised from an originally reported 58,600.)

The survey also showed that average weekly earnings rose 1 per cent from August levels, the biggest one-month increase in more than two years, to $955. Average weekly hours rose to 33, from 32.8 in August.

SEPH combines a survey of the payroll departments of Canadian business establishments with data from actual payroll deductions filed to the Canada Revenue Agency. Most economists consider SEPH's results to be more reliable than those of the more widely reported Labour Force Survey (LFS), which Statscan publishes just days after the end of each month, making it the much more timely labour indicator. SEPH typically has nearly a two-month lag.

The September job gains in SEPH were considerably stronger than the 12,000 reported in the September LFS. On a year-over-year basis, SEPH indicated job growth of 98,000, or an average of about 8,200 a month – well below the 161,000, or more than 13,400 a month, reported in LFS over the same period. However, if you exclude workers identifying themselves in the LFS as self-employed – a group that isn't represented in the payroll-based SEPH – the LFS growth is 93,000, or an average of 7,800 a month. Regardless, both surveys indicate a relatively slow-growth Canadian job market.

And while the September jump in weekly earnings suggests that wage inflation may be picking up after several months of sluggishness, the year-over-year wage growth was a relatively tame 1.7 per cent – evidence of the damage done by the oil shock.

"The loss of high-paying energy-sector positions is showing up in the wage data," said Canadian Imperial Bank of Commerce in a research note. Statscan said Alberta declines were also largely responsible for a 2.3-per-cent year-over-year decline in construction wages, the only major sector where earnings have declined over the past year.

The survey showed year-over-year job losses of 57,000 in Alberta, in stark contrast to the 31,000 net gains reported in the September LFS. On the other hand, Ontario has added 107,000 jobs over the past 12 months.

Despite solid improvements in manufacturing exports this year, that sector's labour market remains tepid. The payroll survey showed a loss of 2,600 manufacturing jobs in the month, and a gain of just 2,800 over the past year, or a minuscule 0.2 per cent. Some of that weakness, again, relates to Alberta and the energy sector, as employment in petroleum-product manufacturing has suffered.

"Factory employment has fallen for four straight months and is now about the same as it was five years ago," wrote Krishen Rangasamy, senior economist at National Bank of Canada, in a research note. "The share of manufacturing in total employment fell to just 9.4 per cent in September, the lowest on records going back to 2001."