The Private Sector Blinks: What October’s Jobs Report Signals for Staffing

Headline employment barely moved, but a 53,000-job drop in private payrolls and a stalled job finding rate tell a more worrying story.

At first glance, October’s Labour Force Survey looked like a pause. Statistics Canada reported that employment was essentially flat, down 4,700, after two months of steep losses: 42,000 jobs in August and 68,000 in September. The unemployment rate rose 0.2 percentage points to 6.7%, its second consecutive monthly increase, and the employment rate slipped for a third straight month to 60.5%.

Private sector employment fell by 53,000, or 0.4%, the first decline since February. The headline was held up by a rebound of 50,000 public sector jobs, which followed four consecutive monthly declines totalling 148,000. Put plainly, the part of the economy that buys most temporary and contract labour shrank, while the part that had been cutting simply stopped cutting.

Where the jobs went

Wholesale and retail trade lost 29,000 positions in October and is now down 113,000 over twelve months, with losses concentrated in Ontario, Quebec and British Columbia. Construction added 16,000 and is up 47,000 from a year earlier, a reminder that housing and infrastructure work continue to absorb skilled trades. Educational services recovered 15,000 of the 35,000 jobs lost in September.

Regionally, Alberta stood out for the wrong reasons. Employment there fell by 24,000 and the provincial unemployment rate jumped 0.9 points to 7.3%, matching Ontario. Quebec’s rate eased to 5.7%, the lowest among the large provinces, although Quebec employment is down 106,000 from a year earlier. British Columbia added 12,000 jobs after a September decline.

It is still a low-hire, low-fire market

The most telling figures for recruiters sit below the headline. The layoff rate was 0.7%, virtually unchanged from a year earlier: employers are not shedding staff aggressively. But the job-finding rate, the share of unemployed people who found work, fell to 18.9%, well below its 2017 to 2019 average of 24.6%.

Long-term unemployment, defined as 27 weeks or more, accounted for 23.7% of Canada’s 1.5 million unemployed. That is up from 21.5% a year earlier and far above the pre-pandemic average of 17.2%. Among workers aged 55 and older, the share reached 32.7%. Youth are also struggling: unemployment among 15 to 24 year olds rose 0.7 points to 13.7%.

That combination describes a labour market that is frozen rather than collapsing. Companies are holding on to the people they have and hesitating to add more. For staffing firms, the effect cuts both ways. Candidate supply is abundant, and experienced workers who have searched for months are more open to contract and temp-to-perm arrangements. Demand, however, is cautious, and the requisitions that do open tend to be narrowly scoped and slow to approve.

Wage pressure eases

Average hourly wages rose 2.2% year over year to $37.89, after 2.3% in September. Wage growth for permanent employees, a gauge the Bank of Canada watches closely, slowed to 2.0%, according to Reuters. Softer wage growth eases pressure on pay rates. It also weakens the case for bill rate increases at a time when clients are absorbing higher energy and input costs.

Household strain in industrial cities

A supplementary question found that 29.7% of Canadians aged 15 and older lived in households that had difficulty meeting financial needs, up 2.0 points in a year. The highest shares were in Oshawa (38.4%), Windsor (36.9%) and Hamilton (35.9%). All three are manufacturing-heavy cities where light industrial staffing is closely tied to the auto and steel sectors.

What to watch

The November survey, due December 4, will show whether the private-sector decline was a one-month blip or the start of a trend. Staffing leaders should track private payrolls more closely than the headline, and keep an eye on the job-finding rate. When that number turns up, hiring confidence is returning.