In case you missed it, Canada printed stronger than expected headline jobs figures last Friday.
But is it really all good beneath the hood?
Here are a few takeaways from the October jobs report.
1. Mostly part-time hiring
The Canadian economy added 43.9K jobs in October, contrary to expectations of a 10K reduction for the month.
Full-time employment actually slipped by 23.1K but this was hugely overshadowed by a gain of 73.1K in part-time hiring.
On a year-over-year basis, employment is up by 140K, buoyed mostly by a 124K increase in part-time positions while full-time hiring was up by a meager 15.5K.
This suggests that Canada’s job situation is barely as strong as the headline figures imply.
The rise in part-time hiring could mean that folks are just settling for being underemployed, likely due to the lack of full-time positions available.
Besides, part-time positions could entail fewer working hours at lower rates, which doesn’t bode well for consumer confidence and spending.
2. Improvement in labor force participation
Still, the jobless rate held steady at 7.0% for the month as both the labor force and the participation rate picked up.
Overall labor force participation ticked up from 65.7% to 65.8% in October, hinting that the jobs market is able to absorb the increase in population.
Then again, this puts the quality of jobs into question since the numbers are likely skewed by part-time positions.
Compared to the same month a year ago, labor force participation is still lower by 0.2%.
3. Gains in youth employment
Another factor to take note of is the significant rise in youth employment, spurred mostly by the increase in the labor force aged 15 to 24. In this age group, full-time employment was higher by 13.4K and the participation rate surged from 63.8% to 64.4%, suggesting that the younger generation may be taking up more stable positions.
Part-time hiring is still noticeably high in this age group, but this isn’t too surprising since a bulk of these constitutes student internships or after-school gigs. Besides, the rise in full-time hiring among the youth could be a ray of hope for Canadian employment conditions in the longer run, as fresh graduates are probably able to take advantage of better-quality jobs.
4. Pickup in the energy sector
One more green shoot that’s worth noting is the rise in employment in the natural resources sector. Employment in this industry, which has taken huge hits ever since crude oil prices started tumbling, finally posted its first gain since 2015. Canada’s energy-rich city of Alberta even reported an increase of 9K in employment, buoyed by – surprise, surprise – an 8.1K rise in part-time hiring.
Of course, one data point doesn’t really make a trend and it’s too early to say that this reflects a rebound in Canada’s energy sector, but a gain is a gain! After all, crude oil prices have had quite a good streak last month so companies likely ramped up hiring activity in hopes of a continued recovery in the industry.
All in all, Canada’s latest jobs report isn’t all that impressive since part-time hiring doesn’t exactly paint a stable employment outlook. The rise in youth full-time employment could pay off in the long run while the performance of the natural resources industry might have a stronger say in near-term hiring trends.