Economic commentary provided by Alberta Central Chief Economist Charles St-Arnaud.
Bottom line
Employment surged by 66.6k in October, significantly stronger than expected. The strong job gains over the past two months more than reverse the weakness over the summer. With the strong job gains, the unemployment rate eased to 6.9%, back to where it was in the Spring. Similarly, the employment rate also improved, reaching 60.8%. We also note that the youth unemployment rate improved to 14.1% but remains elevated.
The details indicate that the increase in employment was primarily due to job gains in the trade, transportation and warehousing, information, culture and recreation, and manufacturing sectors. These are sectors that had shown some underperformance in recent months. We note that there were widespread job losses, albeit modest, in almost all the other industries. As such, out of 17 industries, only 6 showed an increase in employment
We note that despite the strong employment gains, total hours worked in the economy declined by 0.2% m-o-m in October, a second consecutive reduction. While some of the reduction in hours is due to labour disputes, it suggests very weak economic activity in recent months month, unless productivity improved significantly.
Despite the slack in the labour market, wage growth for permanent workers accelerated to 4.0%. Moreover, we estimate that the 3-month annualized change of the seasonally-adjusted series was 5.9%, suggesting that wage growth was elevated in recent months. Continued high wages could be a concern for the Bank of Canada in the current context, where inflation appears to be sticky.
Overall, today’s data shows that the labour market has reversed the weakness seen over the summer. However, one month of data does not create a trend; the details seem to suggest that the strong gains in recent months were mainly a correction of past weakness. As such, the broad modest decline in many industries suggests that there are still underlying weaknesses. While the stabilization in the labour market will provide some comfort to the Bank of Canada in its decision to signal a potential end to the easing cycle, there is still significant slack in the labour market. Moreover, with signs that economic activity will remain tepid in the coming months, further improvements in the labour market are not a guarantee.
Nevertheless, the rebound in employment makes a BoC cut at the December meeting unlikely. However, it remains to be seen if we are witnessing an improving trend in the labour market, especially given economic activity is expected to remain tepid. With this in mind, the possibility of rate cuts in 2026 remains.
Alberta saw an employment gain of 10.3k jobs in October. Coupled with the strong gain in September, the rise in employment in recent months more than reversed the weakness seen over the summer. Despite the employment gains, the unemployment rate was unchanged at 7.8%. Employment in education declined 11.6k, likely due to the teachers’ strike, leading to a 2.1% m-o-m drop in hours worked. As we have shown (see The economic impact of the Alberta teachers’ strike), the strike was a significant drag on economic activity in October.
The strength in the labour market in recent months reverses some strangeness in the data, where the Alberta labour market had underperformed somewhat compared to the rest of the country since the beginning of the year, despite having an economy that is much less impacted by the US tariffs than the rest of the country, since most of its exports qualify for the CUSMA-exemption.
Wage growth in Alberta was unchanged at 3.6% y-o-y and is growing at a slightly slower pace compared to the rest of the country. Moreover, the 3-month annualized change of the seasonally-adjusted series, at 2.2%, suggests that average wages may have slowed in recent months. Wages in Alberta have generally underperformed relative to the rest of the country in recent years (see Why are Albertans so grumpy? It’s about falling behind economically for some explanations).
Employment surged by 66.6k in October, mostly reversing the decline seen in the past two months. With the strong job gains, the unemployment rate eased to 6.9%, while the participation rate inched higher to 65.3% from 65.2%. The employment rate, the share of the population holding a job, also rose to 60.8% from 60.6%. Despite the improvement in October, both the participation rate and the employment rate remain close to their lowest levels since the late 1990s.
Wage growth for permanent workers rose to 4.0% from 3.6% y-o-y in October. However, the 3-month annualized change in seasonally-adjusted wages shows that wages fell from 7.2% to 5.9%, suggesting stronger wage pressures in recent months.
The details show that the job gains were in part-time jobs (+85.1k) while full-time jobs declined (-18.5k). The higher employment in October was largely led by the private sector (73.2k), while there was a decline in the public sector (-4.2k), and self-employment (-2.5k). Over the past year, about 45% of job creation was in the public sector.
Hours worked remained steady in October (-0.2% m-o-m), despite the strong job gains led by full-time employment, suggesting that economic activity was tepid on the month and impacted by labour disputes.
On an industrial level, there were job gains in the service sector (+67.6k) and losses in the good-producing sector (-1.1k).
The details in the service sector show that the job gains were mainly in trade (+40.7k), transport and warehousing (+29.5k), information, culture and recreation (+25.2k), and public administration (+7.1k). These increases were partly offset by a decline in other services (-8.2k), health care (-7.2k), educational services (-7.0k).
The decrease in the good-producing sector was led by construction (-14.8k), natural resources (-1,7k), and agriculture (-0.8k). These losses were partly offset by gains in manufacturing (+8.7k), and utilities (+7.6k).
At a provincial level, the increase in employment was led by Ontario (+54.5k, +0.7% m-o-m), Quebec (+11.5k, +0.2% m-o-m), AB (+10.3k, +0.4% m-o-m), and Newfoundland (+4.4k, +1.8%). On the flip side, there were losses in Nova Scotia (-4.4k, -0.8% m-o-m), Manitoba (-4.0k, -0.5% m-o-m), BC (-2.9k, -0.1% m-o-m), and New Brunswick (-1.7k, -0.4% m-o-m).
The unemployment rate decreased at the national level and saw similarity in the provinces with decreases in PEI (-1.2pp), Saskatchewan (-0.5pp), Newfoundland (-0.5pp), Quebec (-0.4pp), and Manitoba (-0.4pp). On the flip side, the unemployment rate rose the most in Nova Scotia (+0.5pp), and BC (+0.2pp). Compared to last year, the unemployment rate has increased by 0.3pp nationally, and it has increased in most provinces, except in PEI, Saskatchewan, Quebec, Newfoundland, and Manitoba.
The unemployment rate is the highest in Newfoundland (+10.1%), PEI (8.5%), New Brunswick (7.9%) and Alberta (7.8%). It is the lowest in Quebec (5.3%), Saskatchewan (+5.5%), Manitoba (5.8%) and BC (+6.6%).
Wages for permanent workers increased 4.0% y-o-y nationwide. It increased most in Quebec (+5.4% y-o-y), Nova Scotia (+4.9% y-o-y), BC (+4.3% y-o-y), and New Brunswick (+3.9% y-o-y). It rose at the slowest pace in PEI (+1.7% y-o-y), Newfoundland (+1.8% y-o-y), and Manitoba (+3.3% y-o-y).
Looking at CMAs, Employment grew the most over the past year in Drummondville (+44.6% y-o-y), Belleville (+21.3% y-o-y), Kelowna (+15.9% y-o-y), Peterborough (+9.7% y-o-y), and Brandford (+7.9% y-o-y). On the flip side, employment has declined the most in Ottawa/Gatineau (-3.3% y-o-y), Barrie (-2.5% y-o-y), Abbotsford-Mission (-2.4% y-o-y), Guelph (-1.8% y-o-y), and St John (-1.7% y-o-y).
The unemployment rate was the highest in Brandford (9.9%), Kamloops (9.6%), Windsor (9.6%), and Kelowna (9.3%). The lowest rates are in Trois-Riviere (4.2%), Victoria (4.2%), Quebec (4.4%), and Saguenay (4.9%).
In Alberta, employment increased by 10.3k in October and followed a strong gain in September. However, despite the job gains, the unemployment rate remained unchanged at 7.8%, due to a rise in the participation rate to 69.4% from 69.3%. The employment rate, the share of the population holding a job, inched higher to 64.0% from 63.9%. Wage growth for permanent workers accelerated was unchanged at 3.6% y-o-y. However, the 3m/3m annualized wage growth at 2.2% suggests that wage growth was weak in recent months.
The job gains in Alberta were mainly part-time (+13.3k), while full-time jobs decreased slightly (-2.9k). Employment was higher mainly in the private sector (+9.5k), followed by self-employed (+2.6k), while there were some modest losses in the public sector (-1.7k). Over the past year, about 56% of job gains in the province were in the public sector.
Employment increased in both the goods-producing sectors (+2.3k), and the service sector (+8.1k).
The increase in the goods-producing industry was led by utilities (+3.8k) and manufacturing (+3.8k). These gains were partly offset by declines in agriculture (-2.7k) and construction (-1.5k).
The job gains in the service sector were mainly in trade (+12.7k), information, culture and recreation (+6.7k), and public administration (+4.3k). These increases were partly offset by losses in education (-11.6k), health care (-6.6k), and finance, insurance and real estate (-3.0k). The decline in employment in the education sector is very likely due to the teachers’ strike.
On a regional basis[1], the data is published on a three-month average basis (see table below). Over the past three months, the province gained 12.6k jobs each month on average. The increases were in Edmonton (+4.7k), Calgary (+2.9k), Lethbridge-Medicine Hat (+2.6k), Western Alberta (+1.5k), and Camrose-Drumheller (+1.4k). However, there were job losses in Red Deer (-0.5k) and Wood Buffalo-Cold Lake (-0.2k).
The unemployment rate for the province was unchanged at 7.9% on average over the past three months. The unemployment rate increased in Red Deer (+0.5pp) and Lethbridge-Medicine Hat (+0.2pp) and declined in Western Alberta (-0.4pp) and Calgary (-0.1pp).
The unemployment rate is the highest in Lethbridge-Medicine Hat (9.2%), Edmonton (8.5%), and Calgary (7.9%). It is the lowest in, Camrose-Drumheller (5.4%), Western Alberta (6.1%), and Wood Buffalo-Cold Lake (6.3%).
The employment rate for Alberta rose to 63.8% over the past three months. The employment rate improved in Lethbridge-Medicine Hat (+0.9pp), Camrose-Drumheller (+0.8pp), Western Alberta (+0.5pp), and Edmonton (+0.2pp). It decreased in Red Deer (-0.4pp) and Wood Buffalo-Cold Lake (-0.3pp).
Looking for more? Subscribe now to receive Economic updates right to your inbox here!
Independent Opinion
The views and opinions expressed in this publication are solely and independently those of the author and do not necessarily reflect the views and opinions of any organization or person in any way affiliated with the author including, without limitation, any current or past employers of the author. While reasonable effort was taken to ensure the information and analysis in this publication is accurate, it has been prepared solely for general informational purposes. There are no warranties or representations being provided with respect to the accuracy and completeness of the content in this publication. Nothing in this publication should be construed as providing professional advice on the matters discussed. The author does not assume any liability arising from any form of reliance on this publication.