Canada added over 100K new jobs in December

unemployment rate ticked down to 5.0%


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Canadian employment grew for a fourth straight month, and the broad gains strengthen the case for the Bank of Canada to hike interest rates again later this month, Statistics Canada said Friday.

The 104K increase in employment in December contributed to a total 244K increase in employment since August. Canada has added over 620K jobs over the course of the pandemic, and December’s data release shows hiring momentum is still firm. Nearly two-thirds of job gains were concentrated among youth aged 15 to 24, who had previously reported cumulative pandemic job losses.

The remainder of the new jobs were filled by Canadians 55 and older. New jobs were largely created in the private sector in December (+112K). The majority of the boost to employment can be accounted for by the services-producing sector (+82K), driven by transportation and warehousing (+29K), information, culture, and recreation (+25K), and professional, scientific and technical services (+23K), offsetting a pullback in health care and social assistance and education. To date, staffing in the hospitality sector remains 10% below pre-pandemic levels. The construction sector, which is typically more volatile on a monthly basis, posted the largest increase of all industries (+35K).

The data suggest Canada’s job market was still running at an unsustainable pace at the end of last year, raising questions about whether the central bank will need to raise rates even higher to cool demand.

After the jobs release, overnight swaps traders raised the odds of a 25 basis-point increase in the policy rate on Jan. 25 to nearly 90%, up from about two-thirds previously. Canadian Imperial Bank of Commerce changed its forecast, calling for a hike instead of a pause.

The construction industry made notable gains last month, with job numbers rising by 2.3 per cent, up from a previous decrease.

Jobs in the transportation and warehousing sector increased by 3.0 per cent, reversing losses suffered in September and marking its first notable gain since November 2021, the report said.



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