This might sound familiar to American investors. The Canadian job market is tight, labor shortages are becoming a problem, yet wage growth is very sluggish.

The Canadian economy added 11,200 jobs in October due primarily to a surge of full-time hiring, and the unemployment rate dipped to 5.8%, once again reaching its lowest level in 40 years. The decline in the labor force participation rate to 65.2%t, its lowest level since October 1998, helped nudge the jobless rate down to 5.8%.

Since the Canadian labor force data are based on a survey of households, the month to month changes in employment tends to be quite erratic. For example, although full-time jobs rose by 33,900 jobs in October, there was also a reduction of 22,600 part-time positions. In the previous month, there was a huge 63,300 increase in total employment, with full-time employment declining and part-time employment surging.

On an industry basis, the service sector produced the bulk of new jobs in October, and some of the bulge in retail jobs may have been associated with Canada’s legalization of cannabis.

The manufacturing sector was almost flat in terms of job creation in October, and over the twelve months was down 2.2% compared to an economy-wide gain of 1.1%.

Average hourly wage gains, a closely watched figure, has been slowing in Canada. In August the y/y increase was 2.9%, but by October wage gains had slowed to 2.2%. Once again, as in the US, Canadian wages are trending at about the same pace as the CPI inflation rate.

There are some other details on the employment picture which are interesting. As one of the charts illustrates, there was a hefty increase of 20,300 jobs in the private sector in October following an even more impressive 96,000 surge in September.

Moreover, the Business Outlook Survey published by Canada’s central bank highlights that firms were experiencing major labor shortages for both skilled and unskilled workers.

Canada’s central bank has raised interest rates five times in the last 15 months in response to a strengthening economy.

The latest developments in the Canadian job market will not deter the Bank from raising interest rates further.