Canada's employment report for October came in weaker than expected on both headline measures, with employment little changed and the unemployment rate climbing to 6.7%, according to data released by Statistics Canada.

Employment fell by 4,700 during the month, short of expectations for a gain of 13,600, and followed declines of 68,000 in September and 42,000 in August, marking a third consecutive monthly contraction. The unemployment rate rose to 6.7% from 6.5%, above the 6.5% forecast, as 33,000 more people looked for work — an influx of job seekers that expanded the labour force even as employment contracted.

October Labour Market Details

• Employment change: -4,700 vs. +13,600 expected; prior month -68,000
• Unemployment rate: 6.7% vs. 6.5% expected; prior month 6.5%
• Employment rate: 60.5%, down from 60.6% in September
• Average hourly wages: +2.2% year over year, before seasonal adjustment, versus +2.3% in September
• Full-time employment: -18,100, versus -35,400 in the previous month
• Part-time employment: +13,400, versus -32,900 in the previous month

October Components Compared With September

• Youth unemployment rate: 13.7%, up from 13.0%
• Unemployment rate among people aged 55 and older: 5.5%, up from 5.3%
• Educational services employment: +15,000, versus -35,000
• Alberta employment: -24,000, versus +23,000
• British Columbia employment: +12,000, versus -20,000

The demographic and regional splits show how uneven the month was: youth joblessness remained roughly double the overall 6.7% rate, while Alberta and British Columbia swung in opposite directions.

Private Sector Drives the Softness

The private sector was the weak point in October. Private-sector employment fell by 53,000, its first decline since February, while public-sector employment rose by 50,000. That split meant public-sector hiring offset most of the private-sector pullback in the net figures. Wholesale and retail trade lost 29,000 jobs, while construction added 16,000 and educational services added 15,000.

Implications for the Bank of Canada

The private-sector contraction and slower wage growth give the Bank of Canada a reason to be cautious about another rate hike after it raised its policy rate to 2.50% in October, the report's analysis noted. The offsetting factor is energy-driven inflation: the central bank lifted rates out of concern that higher energy costs would spread to other prices. On its own, the employment miss would normally weigh on the Canadian dollar and short-term Canadian yields, putting upward pressure on USDCAD. The November Labour Force Survey, the next scheduled release in Statistics Canada's monthly series, will show whether the three-month slide in employment extends.

USDCAD Moves Higher

The combination of a stronger US jobs report and the weaker Canadian data pushed USDCAD to a new high for the day, returning to levels last seen on October 20. The pair also moved above a swing-area target between 1.4068 and 1.40828, a range that includes the broken 38.2% retracement level, with 1.4110 cited as the next target.

What This Report Measures

Statistics Canada's monthly Labour Force Survey estimates how many people are employed and what share of the labour force is unemployed. The headline employment and unemployment figures are seasonally adjusted to make month-to-month comparisons easier. That mechanic is also why the jobless rate can rise when more people start looking for work, even if net job losses are modest. Traders watch the report for signs of labour-market slack and wage pressure that could influence Bank of Canada policy.