Unemployment declined to 6.9 percent from 7.1 percent in August, the lowest since December 2008, Statistics Canada said Friday in Ottawa. Job creation slowed to 11,900 in September from 59,200 in August as 21,400 workers aged 15 to 24 left the labor force. Economists surveyed by Bloomberg News projected a 10,000 job increase and an unchanged jobless rate, according to median forecasts.
"It's nice to see at least moderate job creation, but the pace has cooled," David Watt, chief economist at the Canadian unit of HSBC Holdings, said in an email. "I don't expect a burst of job creation like we saw late last year. It's disappointing at this stage of the economy to see such weak labor force growth."
Slowing job creation and signs of discouraged workers come a week after the Bank of Canada cut its economic growth forecast for the rest of the year with Senior Deputy Governor Tiff Macklem citing an "elusive" pickup in exports and investment. Employment growth has slowed after domestic spending and employment gains pulled Canada out of a recession triggered by the 2008 global financial crisis.
The unemployment rate declined "as fewer youths searched for work," Statistics Canada said in its report on Friday.
The participation rate fell to 66.4 percent from 66.6 percent, reaching the lowest since February, 2002.
That development is "very disappointing," Watt said. "I would have thought that more would have been getting drawn back into the labor force," he said "Instead the labor force is not keeping pace with the population."
The jobs number confirm the "softening trend" in the domestic economy, said David Tulk, chief Canada macro strategist with TD Securities in Toronto. Friday's data probably won't have major implications for the Bank of Canada, he said.
Full-time employment rose by 23,400 in September and part- time work fell by 11,500 positions. Private companies added 73,600 workers and public-sector employment fell by 16,300.
Finance, insurance real estate and leasing led the job gains by industry with an increase of 33,200 in September. Natural resources employment rose by 18,900.
Manufacturing employment fell by 26,000 and construction by 14,100, Statistics Canada said. Public administration positions fell by 17,400, and has dropped by 7.2 percent over the last seven months, according to the report. Finance Minister Jim Flaherty's last budget had a plan to shrink the federal workforce to help eliminate the country's deficit.
Workers designated by Statistics Canada as employees rose by 57,300, and the self-employed category fell by 45,400.
Average hourly wages of permanent employees rose 1.83 percent in September from a year earlier, exceeding the prior reading of 1.55 percent.