Canada's employment growth was a disappointment in October, rising by just 15,000 or a meek 0.1 percent from September, and falling short of Econoday's consensus for a 25,000 gain.

The unemployment rate was unchanged at 6.5 percent in October from September. Forecasters looked for unemployment to rise to 6.6 percent in October. On a year-over-year basis, the unemployment rate was up by 0.8 percentage points in October.

The data confirms the Bank of Canada's assessment in late October, when the central bank announced a 50-basis point interest rate reduction. Its statement described the labor market as"soft" while its 'Monetary Policy Report' noted that employment growth"has been modest."

The participation rate dipped to 64.8 percent in October from 64.9 percent in September and versus 65.1 percent in August. October's drop in the participation rate was the fourth straight decline and is now at the lowest level since December 1997, excluding the pandemic years (2020 and 2021).

Total hours worked rose 0.3 percent in October and are up 1.6 percent from a year ago. Average hourly wages rebounded, rising by 4.9 percent year-over-year after the annual growth rate slowed to 4.6 percent in September from 5 percent in August.

October was the fourth straight month of relatively anemic employment growth. For October, this reflected an increase of 26,000 in full-time work, partially offset by a decline of 11,200 in part-time work.

Private sector jobs rose by just 20,500 in October after rising 61,000 in September. Public sector employment declined by 17,200 after falling by 24,000 in September and self-employment rose by 11,300 in October.

Canada's economy continues to struggle with the jobless rate expected to tick up to 6.6 percent in October from 6.5 percent in September. Job growth is expected to remain anemic at 25,000.

The Labour Force Survey is a key economic indicator giving an overall picture of employment and unemployment. Employment counts the number of paid employees working part-time or full-time in the nation's business and government establishments. The unemployment rate measures the number of unemployed as a percentage of the labor force.

As in the U.S., this report is used as an indicator of the health of the domestic economy. Employment trends and break-downs by industry groups highlight the strength in job creation and the implications for future sectoral activity. The unemployment rate is used as an indicator of tightness in labor markets and can foreshadow a future increase in wages. Labor force data provide investors with the earliest signs of industry performance. While other data are produced with a month or two delay, these data are available only a week to 10 days after the end of the latest month. Reactions can be dramatic - especially when the result is unanticipated.

The information in the report is invaluable for investors. By looking at employment trends in the various sectors, investors can take more strategic control of their portfolio. If employment in certain industries is growing, there could be investment opportunities in the firms within that industry.

The bond market will rally (fall) when the employment situation shows weakness (strength). The equity market often rallies with the bond market on weak data because low interest rates are good for stocks. But sometimes the two markets move in opposite directions. After all, a healthy labor market should be favorable for the stock market because it supports economic growth and corporate profits. At the same time, bond traders are more concerned about the potential for inflationary pressures.

The unemployment rate rises during cyclical downturns and falls during periods of rapid economic growth. A rising unemployment rate is associated with a weak or contracting economy and declining interest rates. Conversely, a decreasing unemployment rate is associated with an expanding economy and potentially rising interest rates. The fear is that wages will accelerate if the unemployment rate becomes too low and workers are hard to find.