Ottawa-Gatineau bucked the nationwide trend of rising unemployment in October as the region’s jobless rate held steady amid continued population growth.
The National Capital Region’s unemployment rate was 4.9 per cent last month, the same as in September, Statistics Canada said Friday.
The local economy added 8,100 jobs in October, not far off the overall national gain of 18,000 jobs. Meanwhile, the labour force grew by 8,400 people.
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It was the first time in five months that Ottawa-Gatineau’s jobless rate did not increase.
Sectors seeing employment gains last month included tech, education, retail, real estate, health care and transportation, while the public administration sector, the region’s largest employer, shed nearly 6,000 jobs. There were also declines in construction and professional services.
Nationally, Canada’s unemployment rate rose to 5.7 per cent last month as job opportunities became less plentiful in an economy weighed down by high interest rates.
Statistics Canada said the modest gain of 18,000 jobs was not enough to keep the unemployment rate from rising as the pace of job creation trails population growth.
Canada’s unemployment rate was 5.5 per cent in September.
October marks the fourth increase in the jobless rate over the past six months.
“While the headline job gain was uneventful, make no mistake that the underlying picture for Canada’s labour market is softening,” wrote Bank of Montreal chief economist Douglas Porter in a note to clients.
Employment rose last month in construction and information and culture and recreation, but the increase was offset by declines in wholesale and retail trade as well as manufacturing.
Wages continued to grow quickly, but the pace slowed last month compared to September, with average hourly wages up 4.8 per cent to $34.08 from a year ago.
The Bank of Canada opted to hold its key interest rate steady at five per cent during its last two decision meetings, largely due to growing evidence that the economy is feeling the impact of higher rates.
Gross domestic product data showed the economy shrank in the second quarter and a preliminary estimate from Statistics Canada suggests another contraction in the third quarter.
The labour market has remained relatively resilient since interest rates started to rise in March 2022 as employers maintained their appetite for hiring post-pandemic.
But job vacancies have been on the decline this year and Friday’s report suggests job prospects are continuing to dwindle.
Among those who were unemployed in September, a larger proportion stayed unemployed in October than 12 months prior, suggesting “job seekers are facing more difficulties finding employment than a year ago.”
Employment opportunities are expected to become even more sparse as the effect of previous rate hikes increasingly filter through the economy.
During a Senate committee meeting this week, Bank of Canada governor Tiff Macklem said the central bank opted to hold rates steady in part because it is anticipating a wave of mortgage renewals will further cool the economy.
Canadians who are renewing their mortgages with higher interest rates are forced to cut back elsewhere, slowing spending on goods and services.
The Bank of Canada is hoping this pullback will slow inflation and bring it back to its two per cent target.
So far, inflation has fallen considerably from a peak of 8.1 per cent, reaching 3.8 per cent in September.
But higher borrowing costs are posing a new challenge to families, while the cost of necessities continues to climb rapidly.
In October, Statistics Canada says one in three Canadians reported living in a household that found it difficult or very difficult to meet its financial needs when it comes to transportation, housing, food, clothing and other necessary expenses over the previous four weeks.
While that figure is down slightly from a year ago, it’s still up considerably from October 2020, when 20.4 per cent of Canadians reported the same thing.
– With additional reporting from the Canadian Press
