MARKET OVERVIEW
Labour Force Survey: Employment Rate Declines Continue
JOBS ADDED IN OCTOBER
Employment in Canada increased by nearly 15,000 jobs in October, about half of what economists expected, but down from the 47,000 jobs the country’s economy added in September. October’s employment numbers were driven by a 25,600 increase in full-time positions and offset by an 11,200 decline in part-time work.
LABOUR FORCE PARTICIPATION RATE
Meanwhile, the labour force participation rate—the proportion of the population ages 15 and older who are working or looking for work—declined by 0.1 of a percentage point to 64.8% in October, the fourth monthly decline since May. This marks the lowest participation rate since December 1997, excluding the results of 2020 and 2021, when the COVID-19 pandemic occurred.
OCTOBER EMPLOYMENT RATE
The employment rate fell by 0.1 percentage point to 60.6% in October, the sixth consecutive monthly decline. On an annual basis, the employment rate is down 1.3 percentage points.
UNEMPLOYMENT RATE
The unemployment rate remained at 6.5% in October, following a decline of 0.1 percentage point in September. On a year-over-year basis, the unemployment rate increased by 0.8 percentage points.
Nirad Chaudhari
Managing Partner
"Rising unemployment and high cost of living have been major challenges for Canadians throughout 2024. But we’re seeing signs of positive change in the fourth quarter.
Three key sectors—housing, technology, and healthcare—are poised to drive significant job creation in the coming months. Infrastructure projects will continue to create employment opportunities due to the ongoing housing shortage. And while employers remain cautious, many are still hiring on a project or contract basis. The labour participation rate is at its lowest in 27 years, so there’s a considerable number of experienced, employable workers actively seeking opportunities. In this market, it’s essential for job seekers to focus on their passion and hone their expertise. There’s little room for generalists—employers want people who can bring specific skills and deep expertise to the table.”
MARKET OVERVIEW
Canadian Staffing Index
The Canadian staffing index—which reflects the volume of labour supplied by temporary staffing agencies in Canada—was 80 in September, down 7% versus September 2023. Month-over-month, the index fell by 1.2%.
Scott Asselstine
Senior Director of Operations
“As we round out 2024, the Canadian economy and labour market continues to experience volatility. The same goes for the staffing sector.
In September, the Canadian staffing index—which measures the volume of labour supplied by temporary staffing agencies in the country—was 80, down 7% versus the same time last year. Month-over-month, the index fell by 1.2%. There is growing optimism from organizational leaders that the economy and staffing sector will rebound in 2025. But as the year ends, employers continue to focus on cost conscious efforts and employing skilled contract labour.”
MARKET OVERVIEW
Recession Watch 2024
Bank of Canada Makes Fourth Consecutive Rate Cut
- In October, Canada’s Central Bank reduced interest rates to 3.75% from 4.25%—the fourth consecutive cut since June. The last time the Bank of Canada cut rates by 50 basis points at a scheduled meeting was in March 2020.
- The central bank said it sees the neutral rate—the point at which monetary policy is accelerating growth—as being between 2.25% and 3.25%.
- The Canadian economy was flat in August, with estimates showing Canada’s gross domestic product rebounded in September with 0.3% growth.
- Early forecasts show Canada’s GDP grew at an annualized rate of 1% in the third quarter, weaker than the 1.5% growth the Bank of Canada projected.
- The inflation rate slowed to 2.3% on a year-over-year basis in September, which was unchanged from August.
- The consumer price index rose 1.6% year-over-year in September, down from 2% in August. This represents the smallest yearly increase since February 2021 (+1.1%). It was mainly driven by lower year-over-year prices for gasoline (-10.7%).
Sources: Reuters, CBC, Statistics Canada, Statista
Will Further Rate Cuts Speed Up Growth in Q4?
- Canada's economy is performing slightly better than economists forecasted a quarter ago. But growth remains slow. S&P Global expects GDP to increase by 1.2% in 2024 before rising to 2.0% in 2025.
- The unemployment rate is likely to climb through the fourth quarter before reversing course next year when growth picks up. S&P Global believes core inflation will fall to 2% by mid-2025.
- The Bank of Canada will likely reduce interest rates to 2.50% in 2025, S&P Global says. The bank may begin with larger rate cuts of 50 basis points in the next few meetings before moving forward with smaller ones.
Jim Dimovski
Senior Vice President & Executive Partner
“We are seeing some early, positive signs of economic recovery in Canada to close out 2024, propelled by increased demand for contract talent across finance, accounting, and technology. We’re also beginning to see organizations re-prioritize critical projects to address key operational goals that were delayed due to the longer than anticipated economic downturn.
To bring these projects to life, companies are increasingly turning to outsourcing and managed services solutions, particularly in accounts receivable, accounts payable, and payroll functions to help support immediate staffing needs and provide real-time scalability as the economy continues to strengthen. By leveraging these solutions, businesses will better position themselves for long-term success in a competitive talent market.”
