Canada’s unemployment rate climbed while job gains came in weaker than forecasted, indicating that the country’s economy is slowing, economists say.

Canada added 17,500 jobs in October, the majority of which were part-time positions, while the unemployment rate ticked higher to 5.7 per cent from 5.5 per cent the month prior, according to data released by Statistics Canada on Friday. 
“This solidifies that view that yes we are in a period where economic activity is slowing,” Dawn Desjardins, chief economist at Deloitte Canada, told BNN Bloomberg in an interview on Friday. 
Desjardins explained that the slightly weaker-than-expected job gains are a reflection of the Bank of Canada’s rate hikes and are in line with a general softness in consumer and business spending.
Wage growth also came in below economist expectations, which called for a 5.2 per cent rise, while the data showed a moderation to 5.0 per cent from 5.3 per cent the month prior. 
Desjardins said this de-acceleration in wage growth is a data point that the central bank has been anxious to see. 
"These wages numbers are not where they want them to be, but directionally, it does suit the Bank of Canada very well in terms of indicating that the labour market — which has been robust — is finally showing real signs of showing,” she said.
With weaker economic activity expected to continue, Desjardins believes that rate hikes have peaked in Canada. 
“We have thought for a while that the bank would top out at five per cent,” she said. 
In the year ahead, she said that the Bank of Canada’s two per cent inflation target might not be reached, but it will be in sight. 
“That will be sufficient for the Bank of Canada really to ease off on the break a little bit,” she said. 

CIBC economists are also of the view the central bank does not need to raise rates further.
“Today’s (jobs) report is further evidence that more rate hikes are not necessary to cool the economy," Andrew Grantham, economist at CIBC Capital Markets, wrote in a note to clients on Friday. 
He pointed to the particular rise in part-time instead of full-time work as a sign of weakness. 
"The quality of jobs created was also not the best, with full-time positions falling (-3,000), and as such all of the growth was driven by part-time (+21,000). Private paid employment (no change) was also lacklustre again,” he said. 
Rapid population growth is largely to blame for the rise in unemployment in October, rather than job cuts.
"To date, higher unemployment has come from slower hiring (not strong enough to keep pace with rapid population growth) rather than layoffs,” Nathan Janzen, assistant chief economist at Royal Bank of Canada, wrote in a note to clients on Friday. 
However, he flagged that hours worked have essentially flatlined into October, suggesting that the softening in economic output (gross domestic product) will extend into the fourth quarter of this year.
In light of the expected weakness, Janzen agrees that the Bank of Canada is likely to cut rates 
“Signs of softening in labour markets should reinforce the decision to pause rate hikes for now and increase the odds that the next rate change will (eventually) be a cut,” he wrote.