TORONTO — Canada’s economy generated fewer jobs than expected for the second straight month in October, increasing the likelihood that any further interest rate hikes by the Bank of Canada will be pushed into late next year.

DOUG PORTER, DEPUTY CHIEF ECONOMIST, BMO CAPITAL MARKETS:

"The details were better than the headline would suggest. The headline result was a bit on the disappointing side, no question about about it. It does look like most of the finer points of the report were relatively solid. Just to give a few examples: full time employment, private sector employment and goods-producing employment all had a very strong month and those are usually the three areas I would first look at as an indication of how the underlying economy is fairing. And finally, the employment rate itself dipped a tenth, so overall there’s better news than the headline would suggest."

"There might be a trace of disappointment on the headline number, but I think on balance this doesn’t move the needle in a major way. It’s certainly not strong enough to get the Bank of Canada to change their mind on staying on hold anytime soon, but at the same token, it’s not particularly weak, so I don’t think this really has a major impact on Bank of Canada policy."

PAUL FERLEY, ASSISTANT CHIEF ECONOMIST, ROYAL BANK OF CANADA:

"The overall increase was weaker-than-expected though most of the weakness was concentrated in part-time employment. Full-time employment showed a sizable increase in the month. Despite the overall minimal gain, the unemployment rate moved down."

"The composition is a bit more favorable than the headline implies. There’s elements of strength in the report."

SACHA TIHANYI, CURRENCY STRATEGIST, SCOTIA CAPITAL:

"The full-time change in employment was far better than the overall net change in employment as private sector jobs were added by a greater margin than expected. So the underperformance is strictly off of the part-timers."

"Hourly wages increased 2.1 percent on a year-over-year basis so that’s a positive dynamic as well, supporting household consumption."

"On the headline number (the Canadian dollar) shot weaker but that was generally reversed. Although we’re starting to trade back again ... a lot of that has to do with the fact that U.S. dollar strength is in such heavy effect today. But Canada is still outperforming on the crosses."

MARKET REACTION

Canada’s dollar briefly fell to a session low after the data before recovering its poise to trade nearly unchanged on the day..

• The Canadian dollar CADD4 fell to a session trough of C$1.0095 to the U.S. dollar, or 99.06 U.S. cents, from around C$1.0065 to the U.S. dollar, or 99.35 U.S. cents, before the data.

• Overnight index swaps, which trade based on expectations for the Bank of Canada’s key policy rate, showed investors have priced in almost no chance of a December rate hike. Based on a Reuters calculation, the market is pricing in a 97.18% likelihood rates will remain on hold Dec. 7.