Highlights:
- Employment was up 94k in November, the third consecutive monthly increase. All of the gains were full-time, as has been the case year-to-date.
- Job gains were broadly-based across the country with solid growth in BC, Alberta, Ontario and Quebec.
- The unemployment rate fell 0.2 percentage points to 5.6%, a more than 40-year low. The jobless rate had been range bound at 5.8-6.0% this year.
- Wage growth was once again the fly in the ointment, with hourly wages for permanent employees up just 1.5% from a year earlier. Our latest tracking of the BoC’s wage-common is closer to 2.5%.
Our Take:
November’s employment report was a whopper—a massive jump in full-time employment, sizeable job gains in the largest provinces, and lower unemployment even as labour force participation rose. Wage growth was once again disappointing—we’ve essentially seen no hourly pay growth in the last six months. But today’s data is still a nice little holiday from negative global and Canadian headlines in recent weeks. Enjoy it while it lasts, because we’re likely to see some soft data prints in the coming months. Canada’s economy carried little momentum into Q4, and labour disruptions and lower oil prices are likely to take a toll on quarterly activity. Production cuts in Alberta mean slower growth will continue early next year. The Bank of Canada will likely be trimming their growth forecasts come January, a prospect that has seriously dented the odds of a rate hike early next year. But perhaps today’s data is a reminder that the economy is heading into this soft patch on a fairly solid footing, with low unemployment and on-target inflation. We still think the BoC will be raising rates in 2019.
There was little evidence of deteriorating labour market conditions in Alberta. Employment jumped 24k, the unemployment rate fell a percentage point (with only a modest decline in labour force participation), and natural resources employment was steady. That doesn’t mean the province won’t see some pain in the coming months—the survey week for today’s report (November 4-10) came just before Canadian heavy oil prices bottomed out. And production cuts that will ramp up in January could result in some layoffs (or perhaps fewer hours worked), even if they boost oil prices.
