The Canadian job market shot past expectations with 91,000 new jobs in December, a 0.4% increase relative to the previous month. That’s according to Statistics Canada’s Labour Force Survey, released Friday.
The national unemployment rate fell to 6.7%, down from 6.8% in November. That month’s unemployment number was the highest recorded since the pandemic. The December unemployment rate is up 0.9 points relative to December 2023.
Douglas Porter, chief economist and managing director economics at BMO Economics described that unemployment rate as “on the high side,” relative to the last 10 years. “I would still characterize the job market as being a bit soft,” he said. “The bigger picture here is, it’s still a bit tough to find a job, especially for youth. The youth unemployment rate actually picked up half a point to 14.4%.”
The top sector gains were in educational services and the transportation and warehousing sector, both of which saw 17,000 new jobs, followed by finance, insurance, health care and social assistance, each of which reported 16,000 new jobs.
The employment rate rose 0.2 percentage points to 60.8%. It’s the first month-over-month increase reported since January 2023. About 62% (56,000) of the new hires were full-time.
Immigration continues to be a factor, Porter said. “These people are very motivated to find whatever work they can.”
Last fall, the federal government announced reductions to its Immigration Levels Plan, that will see permanent resident targets drop to 395,000 this year, 280,000 in 2026 and 365,000 in 2027.
“If we get something close to what the federal government is expecting, which is essentially wiping out all population growth in the next few years, that does significantly lower the rate of GDP growth,” said Nathan Janzen, assistant chief economist at RBC.
“In the last couple of years GDP has remained very slightly positive even as per-capita GDP has declined significantly,” he said. “With interest rates coming down, we might see some of those per-capita growth trends start to improve and the unemployment rate starting to tick lower later in the year.”
Last year ended with 413,000 more workers than there were at the end of 2023 — a 2% growth rate.
Porter said that’s a sign of resilience, given that the economy grew by only about half that during the year. “It shows you that even when the economy is struggling … there are some jobs out there,” he said. “They might not be great jobs, but people are managing to get employed.”
The U.S. economy added 256,000 jobs, according to the U.S. Bureau of Labor Statistics. The unemployment rate held steady at 4.1%.