MNI: Canada Dec Job Gains Shatter Expectations, Wages Up 5.1%
Canada added 104,000 jobs in December or about 10 times what the market expected, keeping pressure on the central bank to raise interest rates for an eighth straight time later this month.
Higher paying full-time jobs led with 84,500 new positions, Statistics Canada said Friday from Ottawa, and part-time adding another 19,500. The December gain follows increases of 21,100 and 108,300 in the prior two months.
The unemployment rate fell a notch to 5%, the third decline in four months, bringing it nearer to the record low of 4.9% set last year. The December decline was limited as the job gains came alongside a 91,200 increase in the labor force. Economists predicted 10,000 jobs and a 5.1% unemployment rate.
Average hourly wage growth slowed to 5.1% in December from a year ago following November's 5.6% pace, and has exceeded 5% for seven straight months. Economists say the wage measure is of heightened importance at a time the Bank of Canada is worried about inflation expectations.
The report is one of the big pieces of data the Bank is tracking more closely ahead of its Jan. 25 decision where it has signaled it could pause interest-rate hikes after seven straight moves. Canada’s job market has shown momentum amid signs the economy may stall alongside slowing exports, a housing market slump and consumer finances pinched by inflation and higher interest rates. While wage gains have been strongthey have never matched the rise in consumer prices.
Another indicator of the economy's tightness in the jobs data, total hours worked, rose 1.4% from a year ago. Employment gains in December were led by construction, transportation and culture and recreation.
Investors had been roughly split on whether the Bank will hike another 25bps later this month to 4.5% or pause. Officials have also said the decision is more data dependent, and before the meeting there are reports coming on inflation and the Bank’s quarterly survey of firms and consumers.
Canada’s population is about one-ninth the size of the U.S., suggesting the current job gain is on par with a payrolls change approaching one million.