The Canadian labour market extended its gain in December, adding an impressive 78.6k net positions. Despite more Canadians being drawn to labour markets in December, the gains were enough to push the unemployment rate to 5.7% – the lowest rate since 1974.
Part time employment led the way again, adding 54.9k net positions, but full-time employment also rose, up 23.7k for a fourth straight monthly increase and a healthy 2.7% year-on-year gain.
Jobs were mainly among employees (as opposed to the self-employed) with 50.4k added in December. These positions skewed slightly towards the private sector (+28.2k), with the public sector adding 22.1k positions. Self-employment rose 28.2k on net.
By industry, the services side of the economy led the way, adding 72.6k positions. Notable standouts were finance, insurance, and real estate (+25.0k), educational services (+11.2k) and other services (+12.6k). The goods-producing side of the economy saw a more modest 6.0k net positions added as gains in construction and natural resources offset modest weakness in agriculture and manufacturing.
Among the provinces, all saw net hiring in December, but Quebec (+26.9k) and Alberta (+26.3k) topped the leader board. December’s reports were impressive for both provinces: Quebec’s unemployment rate, at 4.9%, reached another record low despite a climb in the participation rate, while Alberta recorded the strongest monthly job growth since 2011.
The hourly wage rate accelerated again, reaching 2.9% on a year-on-year basis. Strength could also be seen in the hours worked, which were up 3.1% year-on-year basis, helped by a robust month-on-month gain.
Key Implications
Unbelievable. We can now chalk up 13 straight months of job gains (a post-crisis record). What’s more, nearly all details of the report were solid: despite more Canadians looking for work, job growth was enough to push the unemployment rate to 5.7%, its lowest level since 1974. It seems that Canadian job markets have been going from strength to strength of late.
The strength of the labour market is perhaps best reflected in further gains in wages, where growth has been robust – the 2.9% yearly climb is a far cry from the lows seen earlier in 2017. A solid climb in hours worked also bodes well for overall economic output in December.
For Bank of Canada governor Stephen Poloz, today’s data should act as a further sign that despite hiccups in some areas of the economy, the underlying trend remains healthy. While risks to the outlook remain and may temper the overall pace of rate hikes, another policy interest rate hike in the near term now seems almost certain.
