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HomeCANADACanada adds 91,000 jobs in December, unemployment rate drops to 6.7%

Canada adds 91,000 jobs in December, unemployment rate drops to 6.7%

January 10: Canada’s job market closed the year on a strong note, with 91,000 jobs added in December, far exceeding economists’ predictions of 10,000 to 25,000 new positions. Statistics Canada’s labour force survey revealed a slight dip in the unemployment rate, now at 6.7%, a 0.1% decrease from the previous month.

TD Chief Economist Beata Caranci praised the resilience of the job market, noting that despite ongoing economic uncertainties, employment growth is encouraging. However, CIBC Senior Economist Andrew Grantham highlighted that the current unemployment rate remains 1% higher than at the start of 2024, which contributes to disinflationary pressures in the economy.

Grantham anticipates a quarter-point interest rate cut in the Bank of Canada’s next policy decision on January 29. The central bank, which currently holds its benchmark rate at 3.25%, is expected to take a cautious approach to further rate cuts, considering five consecutive reductions since June 2024.

The report identified significant employment gains in education, transportation, and finance, with the public sector adding 40,000 jobs. Full-time employment rose by 56,000, while private sector employment saw a modest increase of 27,000 jobs. Self-employment also showed improvement, with a 24,000-job increase in December, marking its first rise since February. However, self-employment remains approximately 100,000 jobs below pre-pandemic levels.

Wage growth continued to slow, with average hourly wages increasing by 3.8% year-over-year in December, the lowest rate since May 2022. Despite this, Caranci noted that wage gains remain slightly above inflation, offering Canadians some improvement in purchasing power.

The Bank of Canada’s next decision will also consider potential impacts of new U.S. policies and looming tariff threats. While job growth offers stability, the focus on labour-driven productivity growth over innovation and investment raises concerns about long-term economic resilience.

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