Canada October jobs miss estimates; jobless rate hits 6.7%

• The prior month recorded a loss of 68,300 jobs.

The report's details follow:

• The employment change stood at -4,700, well below the +13,600 consensus estimate. The previous month's figure was -68,000.

• The jobless rate increased to 6.7% from 6.5% a month earlier, above expectations of 6.5%.

• The employment rate edged down to 60.5% from 60.6% in September.

• Year-over-year average hourly wages grew 2.2%, slowing from 2.3% in September, before seasonal adjustment.

• Full-time employment dropped by 18,100, compared with a decline of 35,400 in the prior month.

• Part-time employment increased by 13,400, versus a decrease of 32,900 last month.

Components for October relative to September:

• Youth unemployment climbed to 13.7% from 13.0%.

• The unemployment rate for those aged 55 and older rose to 5.5% from 5.3%.

• Educational services employment added 15,000 positions, reversing a loss of 35,000.

• Alberta employment fell by 24,000, after a gain of 23,000 a month earlier.

• British Columbia employment increased by 12,000, recovering from a loss of 20,000.

Canada's October jobs data came in below expectations on both key metrics. Statistics Canada reported that employment was essentially unchanged, dropping by 4,700 after declines of 68,000 in September and 42,000 in August. The unemployment rate ticked up to 6.7% as an additional 33,000 people entered the labour force.

The private sector showed the most weakness. Private-sector employment decreased by 53,000, the first decline since February, while public-sector employment rose by 50,000. Wholesale and retail trade lost 29,000 jobs, construction added 16,000, and educational services gained 15,000.

Initial assessment:

The private-sector contraction and slower wage growth give the Bank of Canada cause for caution on further rate hikes after it raised its policy rate to 2.50% in October. The counterweight is energy-driven inflation. The Bank increased rates due to concerns that higher energy costs would broaden into other prices. By itself, the jobs miss would typically weigh on the Canadian dollar and short-term Canadian yields, pushing USDCAD higher.

The USDCAD gained ground following the release.

A stronger US jobs report combined with Canada's weaker data drove the USDCAD to a new daily high, matching levels from October 20. The pair broke above a swing area between 1.4068 and 1.40828, which includes the broken 38.2% Fibonacci retracement. The next target is 1.4110.

What the report captures:

Statistics Canada's Labour Force Survey estimates employment levels and the unemployment rate. The headline figures are seasonally adjusted to facilitate month-over-month comparisons. Traders analyze the data for clues on labour market tightness and wage pressures that could affect Bank of Canada policy.