Unemployment rate jumps to 7.3%

Canada’s jobs market took a turn for the worse last month, driving the unemployment rate up two notches to 7.3 per cent as the economy shed a massive 54,000 jobs overall, most of them in the manufacturing and construction trades.

The employment report from Statistics Canada was even more disturbing in the details, as all the losses and more were in the full-time category and in the goods producing sector.

In all 71,700 full-time jobs vanished during the month — Ontario alone shed 75,400 — as part-time employment rose slightly to make the headline number appear more palatable.

Economists had expected a weak October after September’s surprising 61,000 pick-up, although that was somewhat inflated by returning education workers. But the consensus was for nothing worse than a moderate increase of 15,000.

Statistics Canada pointed out that employment is still up 237,000 over the last four years, but the last four months has seen virtually no increase in employment overall.

The October jobs report is the first significant economic indicator that appears to point to a downturn in the Canadian economy, which many had predicted following the upheaval in markets and plunge in consumer and business confidence surveys since August.

Recently, the Bank of Canada warned it believed the Canadian economy was cooling quickly and would record only a 0.8 per cent growth rate in the fourth quarter, of which October is the first month.

It also said that Europe had entered a mild recession and that the U.S. was also close to falling back into a slump.

The bulk of October’s labour market setback was in the goods producing industries, with manufacturing registering a second consecutive month of losses, this time shedding 48,000 workers. That brings employment in the key sector 2.7 per cent lower in the last year.

As well, the construction sector declined by 20,000, although the industry remains positive for the year as a whole.

Natural resources, with a pick-up of about 12,000, was the only industry to report a notable gain in employment in October.

Regionally, half the provinces experienced a contraction in employment last month, but it was Ontario where the losses were the most notable.

The country’s most populous province saw a decline of 75,400 full-time jobs. There was an increase of 36,600 part-time workers, making the overall losses a lesser shock at 38,700. Quebec and British Columbia also experienced notable job losses with a contraction of 13,300 and 10,800 respectively.