Canadian Job Growth Remains Steady, Maintaining Expectations for Interest Rate Stability – Reuters

Last Updated on December 2, 2023 by Robert C. Hoopes

Canadian Economy Adds 24,900 Jobs in November, Exceeding Expectations

In a surprising turn of events, the Canadian economy added 24,900 jobs in November, surpassing expectations of a 15,000 gain, according to the latest employment data released by Statistics Canada. However, the jobless rate increased slightly to 5.8% from 5.7%, indicating that there is still work to be done in terms of reducing unemployment.

One concerning trend highlighted in the data is that population growth in Canada has been outpacing employment growth. This means that despite the increase in job numbers, there is still a gap that needs to be filled in order to accommodate the growing population.

As a result of the positive job growth, the Bank of Canada is expected to leave interest rates unchanged next week. The central bank’s decision reflects the belief that the current job market conditions are favorable and do not require any immediate adjustments.

Additionally, the average hourly wage for permanent employees rose by 5.0% from November 2022, maintaining the same annual rise as in October. This increase in wages is an encouraging sign for Canadian workers and reflects the overall improvement in the labor market.

The employment gains in November were primarily driven by full-time positions, offsetting a decline in part-time positions. The goods sectors, particularly manufacturing and construction, saw a net increase of 38,300 jobs, signaling growth in these industries. However, the services sectors, including wholesale and retail trade and finance, experienced a loss of a net 13,400 jobs.

Despite the positive job growth in November, the data suggests a deceleration in job creation and a slowing Canadian economy overall. This has led to firm expectations of rate cuts in early next year as a measure to stimulate the slowing economy. Analysts believe that these rate cuts would help support further job creation and boost overall economic growth in the country.

Overall, while the Canadian economy experienced better-than-expected job growth in November, there are still challenges to be addressed. The slight increase in the jobless rate, along with the imbalance between population growth and employment growth, indicates that there is room for improvement. The Bank of Canada’s decision to keep interest rates unchanged reflects confidence in the labor market, but rate cut expectations for early next year remain firm due to the overall slowing economy.