December full-time job numbers show surprise uptick
January 10, 2020
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Canada gained a higher-than-expected 35,200 net jobs in December, entirely in full-time positions, while the unemployment rate fell to 5.6 per cent, official data showed on Friday, figures that could ease some concerns about the strength of the Canadian economy.
Analysts in a Reuters poll had forecast a gain of 25,000 jobs in December and an unemployment rate of 5.8 per cent. Wages for permanent employees rose by 3.8 per cent, Statistics Canada said, lower than the 4.4 per cent gain seen in each of the previous two months.
Canada shed an unexpected 71,200 net jobs in November, the biggest decline since 2009, while the national unemployment rate rose to 5.9 per cent.
“It’s a decent rebound,” Andrew Kelvin, chief Canada strategist at TD Securities, told Reuters. “It should put some of the immediate fears around the Canadian economy not to rest, but certainly make them a little bit less intense.”
The Canadian dollar strengthened after the jobs gain, touching 1.3032 to the U.S. dollar, or 76.73 cents U.S.
The Bank of Canada has held its overnight interest rate steady since October 2018 even as several of its counterparts, including the U.S. Federal Reserve, have eased. The central bank’s next interest rate decision is set for Jan 22.
Addressing a business audience on Thursday in Vancouver, Bank of Canada Governor Stephen Poloz said the central bank would be watching to see if the recent slowdown in job creation persisted.
“I think (Poloz) will be pleased to see that rebound in jobs numbers in December,” Josh Nye, a senior economist with RBC, told Reuters.
Full-time employment, Statistics Canada said on Friday, increased by 38,400 net positions, while part-time employment dropped by 3,200.
Meanwhile, Canada’s goods-producing industries gained 15,700 net jobs, mainly in construction. The services sector saw an increase of 19,400 net positions, largely in accommodation and food services.
Friday’s stronger-than expected jobs report follows a recent string of unimpressive domestic data analysts have said could point to the fourth-quarter annualized economic growth coming in below the central bank’s 1.3 per cent forecast in October.
“I think (the Bank of Canada) will be relieved they didn’t get another negative,” said Benjamin Reitzes, Canadian rates and macro strategist at BMO Capital Markets. “There would be much more concern if you got three consecutive negative prints on the headline.”
Poloz said Thursday the most recent economic data had been mixed, telling reporters the fourth quarter had seen some unusual weather and strikes.