A construction worker is pictured on a construction site in Vancouver on May 14, 2024. The Canadian economy added 91,000 jobs in December, and the unemployment rate dipped to 6.7 per cent, Statistics Canada said on Friday. (Hunter Soo/CBC)
Canada's job market saw a strong performance in December, with an impressive addition of 91,000 jobs, according to Statistics Canada. This marked a 0.1 percentage point drop in the unemployment rate, bringing it to 6.7%, a significant improvement that exceeded economists' expectations. Analysts had forecasted only 25,000 new jobs for the month, making the actual figure more than three times higher than anticipated.
The previous month's unemployment rate stood at 6.8%, with 51,000 jobs added. Experts noted that the country's economy is showing positive signs, particularly in the wake of challenges posed by high inflation and interest rates. BMO's chief economist, Doug Porter, reflected on the shift, stating that while the economy is not yet experiencing strong growth, the groundwork for potential improvements in 2025 is being laid.
A slowdown in population growth may help explain the slight dip in the unemployment rate, which is calculated based on the number of individuals actively seeking employment. Porter pointed out that in December, job creation outpaced the number of new entrants into the labor force, a rare occurrence over the past year.
Full-time jobs accounted for the majority of the new positions, with notable gains in sectors such as educational services, healthcare, social assistance, finance, and transportation. The public sector saw a significant increase, adding 40,000 jobs, while the private sector experienced a modest growth of 27,000 jobs. Additionally, self-employment rose by 24,000, marking its first increase since February.
The average hourly wage also showed growth, rising by 3.8%, or $1.32, to $35.77 compared to the same period in 2024. However, this increase represents the slowest wage growth since May 2022.
CIBC senior economist Andrew Grantham acknowledged that while the report exceeded expectations, the still-elevated unemployment rate points to lingering slack in the economy. He emphasized the need for further interest rate cuts to fully address the remaining economic capacity.
Statistics Canada's monthly report also highlighted the importance of the Canada-U.S. trade relationship, noting that 8.8% of Canadian workers are employed in sectors heavily reliant on U.S. demand for Canadian exports. Alberta, in particular, benefits from these industries, with a significant concentration of jobs in oil and gas extraction, pipeline transportation, primary metal manufacturing, and transportation equipment manufacturing.
