By Akhil Shah

OTTAWA (MNI) – Friday’s Statistics Canada jobs report is expected
to show October experienced continuing growth in employment although
growth that was fairly reserved.

Expectations for the report in a Market News International
survey of economists centered on a gain of 17,000 jobs. Canada’s labor
market had a surging first half followed by a slower third quarter but,
in contrast to the U.S., has already recovered the more than 400,000
jobs lost during Canada’s short but sharp recession.

The unemployment rate will most likely remain elevated at 8.0%,
reflecting an increase in Canadians entering the labor force, analysts
expect.

Despite the recovery and continuing if slower growth, analysts say
concerns remain about the majority of the new jobs having come from the
public rather than the private sector, and from the proportion
of part-time work.

After a third quarter which saw an addition of a mere 20,000 jobs
— if the predicted gains are realized — Statistics Canada will report
a somewhat stronger start to the fourth quarter in this year of rebound.

This moderate growth would be in line with the Bank Of Canada’s
downwardly revised projection of GDP growth for the quarter, from 3.2%
expected earlier to 2.6%.

Looking ahead, the BOC now sees growth in the first quarter of 2011
slowing to 2.6% from an earlier prediction of 3.0%. The second
quarter prediction for 2011 was also lowered, to 2.3% from 3.0
expected earlier.

Sal Guatieri, senior economist at the Bank of Montreal, predicts
the slowing Canadian economy will produce 16,000 jobs in October and the
unemployment rate, annualized, to remain at 8%.

Services-producing industries will provide the most new jobs, he
said, since for them the “trend has been healthy.” Retail and wholesale
sales sectors are expected to boost growth. “The goods producing
industries will see a weakness in the construction sector as housing
starts have fallen,” he said in an interview. “Overall we expect modest
job growth through Q4, averaging 10,000 to 15,000 per month,” he said.

Robert Kavcic, economist at the Bank of Montreal, further noted
that his bank “pretty well confirms the BOC’s expectations for GDP
growth, as the employment growth has slowed from the first half of the
year.”

Craig Wright, chief economist at the Royal Bank of Canada,
estimates employment will increase by 22,900, well above the market
consensus. “We expect the goods-producing sector to increase by 5,900
and the services-producing sector to increase by 17,000,” he told Market
News International.

This significant increase in the services-producing sector will
amount to ” payback for some of the declines seen earlier,” Wright said.
The small rise in the goods-producing industries will be attributable to
a decrease in the construction sector because of slowing Canadian real
estate activity.

Ted Mallett, vice president and chief economist at the Canadian
Federation Of Independent Business (CFIB), sees modest employment
growth, because of “a healthy uptick in business sentiment.”

“There has been improvement in general business and the inventory
levels are trending better than they were before,” Mallett said. The
CFIB’s October’s small and medium enterprises business outlook survey
stated that only 12% of business owners are planning on hiring
additional full-time staff, while 15% are expecting to downsize. The
remaining 73% are projected to remain at the current level.

The expected sluggish GDP growth in the fourth quarter will
continue to prevent the labor market from expanding substantially. That
is an outcome expected by Canadian business leaders surveyed by the Bank
of Canada: only 39% of respondents intended to increase employment over
the next 12 months.

— Akhil Shaw is a Need to Know News reporter in Ottawa

** Market News International Ottawa **

[TOPICS: M$C$$$,MAUDS$]