Employment rose by 104,000 (+0.5 per cent) in December in Canada, and the unemployment rate declined 0.1 percentage points to 5.0 per cent, just above the record low of 4.9 per cent reached in June and July, reported Statistics Canada on Friday.
Christina Morillo
“Employment growth was led by an increase among youth aged 15 to 24, which recouped cumulative losses observed for this group from July to September,” explained the federal agency.
“The number of employees increased in the private sector, while it held steady in the public sector. There were broad-based employment gains across several industries, including construction, as well as transportation and warehousing.
“Employment increased in Ontario, Alberta, British Columbia, Manitoba, Newfoundland and Labrador, and Saskatchewan in December. There was little change in the other provinces.”
StatsCan said employment had previously peaked in May 2022, followed by a downward trend to August. As a result of cumulative gains since then, employment in December was 130,000 (+0.7 per cent) above its May level.
“The increase in employment in December was driven by full-time work (+85,000; +0.5 per cent), which rose for a third consecutive month. Full-time work also led employment growth over the course of the year ending in December 2022. On a year-over-year basis, employment was up by 394,000 (+2.0 per cent), entirely due to gains in full-time work (+401,000; +2.5 per cent),” said the report.
“The number of employees in the private sector rose by 112,000 (+0.9 per cent) in December, the largest increase since February 2022. This brought the year-over-year increase in private sector employees to 325,000 (+2.6 per cent).
“In contrast, the number of employees in the public sector and the number of self-employed workers were both little changed on a monthly and year-over-year basis in December.”
The decline in the unemployment rate was the third decline in four months.
Andrew Grantham, an economist with CIBC Economics, said last year was another wild ride for the Canadian labour market. He said employment in December blew way past consensus expectations for a paltry 5,000 gain.
James Orlando, Senior Economist with TD Economics, said2022 was a banner year for the Canadian labour market. The economy gained 381,000 jobs, while the unemployment rate has remained right around the historical low of 4.9 per cent established in the spring.
“This helped wages rise by over five per cent y/y during the back half of the year, incentivizing more people to enter the workforce. Today’s impressive report speaks to this strength. The surge in employment and rise in the labour force make this an incredibly positive print. The fact that most of the gains were full-time positions in the private sector and spanned many industries further supports the robustness of today’s numbers,” he said.
“Today’s report reinforced expectations that the Bank of Canada will continue hiking its policy rate at its meeting in late January. Though the BoC has signaled it could go either way with its next policy decision, the continued strength in employment means that the Bank isn’t done yet.”
“While it’s always dangerous to read too much into a single Canadian jobs report, it’s safe to conclude that the economy still had some serious zip at the end of last year,” said Doug Porter, Chief Economist with BMO Economics. “True, the labour market is typically the last to turn when conditions soften broadly, but there is precisely zero hint of any such softening in the jobs data. At the very least, today’s robust results support the view that the BoC will hike rates again later this month. We are calling for a 25 bp rise to 4.5 per cent and then a move to the sidelines to reassess. Suffice it to say that with wages still running around five per centand the jobless rate holding at five per cent, the risk is heavily tilted to the need for the Bank to ultimately do even more to quell underlying inflation pressures.”
(Mario Toneguzzi is Managing Editor of Canada’s Podcast. He has more than 40 years of experience as a daily newspaper writer, columnist, and editor. He worked for 35 years at the Calgary Herald, covering sports, crime, politics, health, faith, city and breaking news, and business. He works as well as a freelance writer for several national publications and as a consultant in communications and media relations/training. Mario was named in 2021 as one of the Top 10 Business Journalists in the World by PR News – the only Canadian to make the list)
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