Canada’s labor market continued to heal in October as retail businesses ramped up hiring, though the pace of gains has begun to cool.

The economy added 31,200 jobs last month, Statistics Canada said Friday in Ottawa, missing expectations for a gain of 41,600 in a Bloomberg survey of economists. The unemployment rate fell to 6.7 per cent from 6.9 per cent in September, and total hours worked rose 1 per cent.

The report signals the economic rebound is intact, with companies finding workers as COVID-19 restrictions vanish. Yet, the data also illustrate how future job gains will return to more normal levels — which averaged 23,000 per month in the two years prior to the pandemic — as labor slack diminishes.

“Underlying indicators of limited labor market slack are starting to flash,” Simon Harvey, senior FX market analyst at Monex Europe Ltd., said by email.

Canada’s currency was little changed after the report, trading at about $1.2445 per U.S. dollar at 9:32 in Toronto trading. Bond reaction was also muted, with the yield on Canada’s two-year benchmark falling one basis point to 0.97 per cent…read more.