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Fewer Canadians claimed jobless benefits in October and the number of new claims continues to fall, more signs the labour market is stabilizing.

The number of people receiving regular employment insurance benefits fell 0.5 per cent to 809,600 in October, Statistics Canada said Tuesday. The report didn't say how much of the drop was due to the expiry of claims.

Initial and renewal claims, which have fallen in every province since their peak in May, continued to decline. In October, they fell 2.5 per cent to 270,300, led by a drop in Ontario.

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The report comes after Bank of Canada Governor Mark Carney said last week there are "signs of stabilization" in the labour market. Employers churned out about 79,000 new jobs last month, sending the jobless rate to 8.5 per cent from 8.6 per cent.

A separate Statscan report today showed a modest increase in October non-farm payroll employment. This measure shows employment has been flat since June, a shift from the steep job cuts that occurred in the first eight months of the recession.

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The number of people receiving regular EI benefits peaked in June, at 829,300, the agency said. Since then, it has declined slightly - a stark contrast to the first eight months of the recession when monthly increases averaged 41,100 people.

While the drop in new claims is encouraging, it's impossible to discern how much of the drop in regular claims is due to benefit expiration and how much to people landing jobs.

"The key unanswered question is whether these workers found jobs or simply ran out of benefits," said Erin Weir, economist at the United Steelworkers. "At a minimum, the fact that 7,000 fewer EI claims were filed in October confirms that the pace of layoffs is slowing."

Men, particularly young men between 15 and 24, have seen the largest increase in EI claims.

"Employment losses have affected men more than women, since more men work in the manufacturing and construction sectors," the report said. "The employment losses also affected youth more than older workers, as in previous downturns." Over the past year, the number of regular EI beneficiaries has climbed 61.8 per cent to 309,300 with gains in every province and territory.

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The largest increases have been in Ontario, Alberta and British Columbia. Among cities, the number of beneficiaries has more than doubled in every metropolitan area in Alberta and British Columbia, as well as in Greater Sudbury, Hamilton and Saskatoon.

By contrast, all large centres in Quebec and the Atlantic provinces have shown smaller year-over-year increases in regular EI use, Statscan said.

In October, Quebec led the decline in the number of regular EI beneficiaries. Regular claims rose in Ontario and continued to climb in Alberta.

Separately, non-farm payroll employment rose 34,500 in October. Education, health care and social assistance, as well as construction and banking led the gains.

The increases in education, health care and social assistance employment are part of a long-term trend. Construction-related payroll jobs have been rising since June.

Payroll employment has been rising at an average of 4,200 jobs a month nationally since June. "This is not large, but is a notable change from the average monthly loss of 51,200 jobs in the eight months that followed October 2008," Statscan noted.

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One of the biggest shifts in trends has been in manufacturing, where the pace of layoffs has tapered off. Recently, car parts makers and lumber and plywood manufacturers have been hiring.

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About the Author

Tavia Grant has worked at The Globe and Mail since early 2005, covering topics from employment and currency markets to trade, microfinance and Latin American economies. She previously worked for Bloomberg News in Toronto and Zurich, writing on mining, stocks, currencies and secret Swiss bank accounts. More

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