Canada's job market posts surprise?expansion in October, unemployment falls

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Canada adds 66,600 jobs in October led by part-time workers

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Unemployment rate falls to 6.9% from 7.1% in September

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Average hourly wage of permanent employees increased by 4.0%

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Youth unemployment rate drops from a 15-year high level

By Promit Mukherjee

OTTAWA, Nov 7 (Reuters) -

Canada's job market made a surprise gain in October, reversing past declines, and its unemployment rate fell, data showed on Friday, a bright spot in a country that has suffered from U.S. President Donald Trump's tariffs.

The economy added a net 66,600 jobs following 60,400 job gains in September, Statistics Canada said, helping offset most of the job losses recorded in July and August.

All of the October gains were in the part-time workers category, in which employment rose by 85,000 people and was concentrated in the private sector.

Full-time employment dropped by 18,500 people, StatsCan said.

UNEMPLOYMENT RATE DIPS

The unemployment rate, which has hovered around a nine-year high excluding the pandemic, fell to 6.9% in October from 7.1% in September.

Analysts polled by Reuters had forecast a jobless rate of 7.1% and estimated the economy would lose 2,500 jobs in October. Canada's economic growth potential has withered this year as U.S. tariffs led to job losses in the steel and automotive sectors, while choking hiring in related industries.

"Finally, some good news on the Canadian economy," Royce Mendes, managing director and head of macro strategy at Desjardins Capital Markets, wrote in a note. "This could end up being the first sign of recovery for an economy that's been reeling."

Youth unemployment has been particularly affected and peaked at a 15-year high in September. But October marked a sharp U-turn.

Unemployment for people aged 15 to 24 slid to 14.1% last month from 14.7% in September, the first decline since February, the statistics agency noted.

Employment among the core-aged group - 25 to 54 years - which accounts for two-thirds of the labor force, showed a healthy increase of 38,800 jobs, all part-time. Unemployment in the core group fell 0.2 percentage points to 5.8%.

Employment numbers are highly volatile.

ONTARIO LEADS IN JOB GAINS

Nearly one in five unemployed people in September found work in October, StatsCan said.

The biggest increase in job gains was in Ontario, which has been the province worst hit by tariffs due to its steel and automotive sectors. Employment in Ontario rose by 55,000 jobs in October.

Doug Porter, chief economist at BMO Capital Markets, linked Ontario's job gains to the playoff run of Major League Baseball's Toronto Blue Jays.

Among industry groups that contributed most to the job gains were wholesale and retail, transportation and warehousing, StatsCan said.

Canada's employment is primarily divided between the services sector and the goods sector, with four of every five people working in services.

Retail and wholesale, part of the services sector, is the biggest employer in the country, with almost 15% of the workforce. This sector saw a job gain of 40,700.

The average hourly wage of permanent employees - a gauge closely tracked by the Bank of Canada to ascertain inflationary trends - rose 4% in October from 3.6% in September.

The healthy job numbers helped the Canadian dollar, which was trading up 0.36% to 1.4065 against the U.S. dollar, or 71.10 U.S. cents. Yields on two-year government bonds were up 4.6 basis points to 2.405%.

(Reporting by Promit Mukherjee; Editing by Dale Smith, Rod Nickel)