07:00 AM EST, 11/11/2024 (MT Newswires) -- Employment in Canada increased by 14,500 in October, noted David Doyle, head of economics at Macquarie, following Friday's Labour Force Survey (LFS).

Despite the weak gain, the unemployment rate was steady at 6.5%, as the participation rate declined, driven by softness in younger workers and those of core working age.

This continues a trend that has been in place for the past year, where weak participation has suppressed the rise in unemployment, said Doyle. For context, if participation held steady from October 2023, the unemployment rate would now be 7.6%.

In a bright spot, hours worked rebounded by 0.3% month over month, after declining in August and September. This may support estimates of Q4 real gross domestic product growth, added the economist.

The population growth assumption moderated. This declined to 85,000 gains after averaging 110,000 rises in Q3, a reflection of the shifting immigration policy. The gap between the trend in employment growth and the breakeven level -- required to keep the employment rate constant -- remains substantial, suggestive of a widening output gap.

For the Bank of Canada ahead, Macquarie continues to expect another 50bps cut in December 2024, followed by four successive cuts of 25bps per meeting, with the overnight rate reaching 2.25% in June 2025.