WRAPUP 1-Canada’s job growth slows as recovery sputters

* Employment growth remains sluggish in October

* Building permits soar on single-family housing

* Outlook worsens for home resales

* No rate hike expected until next year

* C$ falters before rebounding to hit parity

By Louise Egan

OTTAWA, Nov 5 (BestGrowthStock) – Canadian employment numbers
barely inched higher in October as the sputtering economy
created far fewer jobs than forecast, and left expectations
intact for interest rates to stay on hold.

About 3,000 people — a number considered negligible —
found work in the month, according to Statistics Canada data
released on Friday. That was not enough to offset the 6,600
jobs lost in September and well below the 15,000 employment
gain forecast by analysts in a Reuters poll.

Job gains in recent months have been a fraction of those
seen earlier this year. Statscan said the average monthly
employment growth was 5,700 in the past four months compared
with 51,000 in the first half.

“I think there might be a trace of disappointment on the
headline number, but I think on balance this doesn’t move the
needle in a major way,” said Doug Porter, deputy chief
economist at BMO Capital Markets.

All the gains were in full-time jobs and private sector
hiring outpaced that of the public sector, suggesting the
recovery was becoming more entrenched.

The unemployment rate eased to 7.9 percent from 8 percent
in September mainly because fewer people were in the labor
force actively looking for work.

Other reports on Friday on the construction and housing
sectors were mixed. Statscan said building permits soared 15.3
percent in September, largely due to a resurgence in plans for
single-family housing.

But the Canadian Real Estate Association issued gloomy
forecasts for home resales this year, predicting a decline of
4.9 percent versus its previous estimate of a 1.2 percent


The data cocktail did little to change analysts’ view that
the Bank of Canada will stand pat on interest rates until well
into 2011. The bank kept its key rate on hold last month at 1
percent after three straight increases.

“We expect the bank to stay on the sidelines for the
remainder of the year with the next hike likely only after
there is solid evidence that concerns about both the external
and domestic developments have abated,” said Dawn Desjardins,
assistant chief economist at RBC Economics.

Markets see a 97 percent probability the central bank will
hold rates steady on Dec. 7 and expect no further hike until
roughly mid-2011, according to a Reuters calculation of yields
on overnight index swaps. (BOCWATCH: )

The Canadian dollar (CAD=D4: ) fell to a session low of
C$1.0095 to the U.S. dollar, or 99.06 U.S. cents, immediately
after the Canadian employment report, but it quickly pared
losses as markets digested the details. The currency shot up
again after the U.S. data to hit parity against the greenback.


The heaviest hiring took place in the information, culture
and recreation sector, followed by construction, manufacturing
and agriculture. Retail and wholesale trade let go workers.

Some details in the report were more encouraging. All the
gains were in full-time jobs, while part-time employment fell
for a third straight month. In the first half of this year
part-time jobs grew almost three times as fast as full-time

Similarly, private sector hiring outpaced that of the
public sector, suggesting a more deeply entrenched recovery.

The average hourly wage of permanent employees, closely
watched by the Bank of Canada for inflation pressures, rose 2.1
percent in October from a year earlier. The equivalent figure
for September was 2.5 percent.

Unlike in the United States, Canadian employment levels
have returned to pre-recession levels. But Statscan said the
jobless rate has stayed stubbornly above the pre-crisis 6.2
percent level largely because the working-age population has
grown 2.9 percent and the labor force — those looking for work
— has risen 1.9 percent.

Despite the gains, full-time employment remains well below
its peak, prompting concerns about the quality of jobs.

A report by CIBC this week said the public sector and
construction industry, helped by stimulus spending, have
accounted for one-third of all jobs created during the
(Additional reporting by Howaida Sorour, Ka Yan Ng and
Solarina Ho; editing by Rob Wilson)

WRAPUP 1-Canada’s job growth slows as recovery sputters