Canada’s economy just had its second-best year for jobs since 2007

Canadian employment rebounded in December after two straight monthly declines, capping the second-best year since the recession and supporting the Bank of Canada’s view that the bottom isn’t coming out of the labour market.

Canada’s economy created 35,200 jobs in December, Statistics Canada said Friday in Ottawa. That brings the total number of jobs added to 320,300 this year, the second-most since 2007. The unemployment rate ticked down in the month to 5.6 per cent, from 5.9 per cent in November, and wage gains decelerated to a still healthy 3.8 per cent from a year earlier.

December’s report was crucial for policy makers in assessing the health of the nation’s job market, and should back the central bank’s view that the labour force continues to be resilient, despite trade headwinds weighing on other components such as exports and business investment.

”Overall, a healthy enough report to have the Bank of Canada maintaining its steady as she goes stance in January,” Avery Shenfeld, chief economist at Canadian Imperial Bank of Commerce, said in a note. He cautioned, however, that because fourth-quarter gross domestic product looks to be tracking only a 0.5 per cent growth rate, “we expect softer jobs figures ahead.”

Currency traders liked the report. The Canadian dollar reversed an earlier decline and was up 0.2 per cent to C$1.3036 against its U.S. counterpart at 8:53 a.m. Toronto time.

Key Insights

  • Policy makers may use this report to look past the prior two months of weak jobs data and support their view that the labour market remains a source of strength against an otherwise lacklustre backdrop
  • The report was largely in line with economist forecasts for a 25,000 gain in employment, as most were expecting jobs to bounce back from the prior two months of losses but to remain below the highs seen earlier in 2019
  • Employment gains in December were mainly a result of full-time jobs increasing by 38,400 jobs, while part-time employment dropped slightly by 3,200 jobs

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  • The private sector reversed course with nearly 57,000 job increases, offsetting a decline of a similar size in November; public-sector employment dropped by 21,500
  • Provincially, employment gains in December were led by Ontario and Quebec; British Columbia led declines
  • For the year, employment increased for both young men and women, and for men ages 25-54, and 55 and older
  • For 2019, services producing jobs rose 367,000, versus a decline of 47,000 in the good-producing industries

    Bloomberg.com

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