The Canadian labour market added 104k positions in December, with full-time employment up 84.5k and part-time employment up 19.5k.
The unemployment rate fell by 0.1 percentage points, to 5.0%. The participation rate rose to 65% (up 0.2 percentage points).
By industry, employment was up in construction (+35k), transportation and warehousing (+29k), and information, culture and recreation (+25k). Losses were seen in health care and social assistance (-17k).
Lastly, total hours worked were up 0.1% month-on-month and wages were up 5.1% year-on-year (y/y).
Key Implications
2022 was a banner year for the Canadian labour market. The economy gained 381 thousand jobs, while the unemployment rate has remained right around the historical low of 4.9% established in the spring. This helped wages rise by over 5% 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.
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.
