CANADA DATA: Strong Job Gains In September, But Divergences Warrant Caution(1/3)

The September Labour Force Report was much stronger than expected, in yet another large miss for consensus on the degree of job creation. The underlying details don't fully convince that the labor market has hit a turning point in a positive direction, with a lot of unusual divergences that suggest a note of caution should be taken with the data. Overall we take a multi-month view on recent labor developments which points to flat-at-best employment dynamics, though this report should assuage concerns over a more rapid deterioration.

• Underlying Job Gains Positive But Mixed: The net change in employment of +60.4k defied consensus for a flat reading (5k) and was well outside the range of Canadian institutional analyst estimates compiled by MNI (-50k to +25k). It doesn't quite reverse the 106k combined drop in the previous months, with 46k fewer jobs in total over the last 3 months, but it at least brings the 6-month moving average back into positive territory (+9k, after -7k).
• There were some notable divergences in trends underneath  the surface. Full-time employment jumped 106.1k after a 6.0k contraction in August. However, part-time employment continued to collapse, down 45.6k after 59.7k. The 27-month best in FT employment gains meant that jobs in this category are slightly positive for the year (came into September at -105k).
• That left the 3-month sum of FT gains at 49k, whereas in contrast, PT job gains - which had neared 100k going into the now-two-month contraction - have fallen 95k in the last 3 months.
• Meanwhile, the job gains were skewed heavily toward a single province: Alberta, which saw 42k gains, one of the highest figures on record.
• There were big divergences in the demographic outcomes as well. Prime-age (25-54) employment, which is the lion's share of the labor force, jumped 109k for the first 100k+ since February 2022, and perfectly reversing the 109k drop the prior 2 months. But 15-24 age employment fell for a 2nd month in 3 (-4k) while 55+ employment fell the most since April 2021 (-44k).