By Paul Vieira
OTTAWA--Job gains in Canada slowed in December after a stellar performance in the previous month but continued on an upward trend, with employment now 1.3% above prepandemic levels.
The unemployment rate fell for a seventh straight month to below 6%.
December's report suggests solid labor-market activity and an economy close to full employment. However, December's data are based on survey results from early that month, before Canada's two most populous provinces introduced economic and social restrictions to curb rapid transmission of the Covid-19 Omicron variant. Economists expect job gains to either slow sharply or employment to decline early in 2022 as a result.
Statistics Canada reported Friday that Canada's economy added a net 54,700 jobs in December, following a gain of over 153,000 the month before. Market expectations were for a 25,000 advance in December, according to economists at TD Securities.
Hours worked rose 0.3%. All the net new job gains were full time, up 122,500. Part-time employment fell 68,000.
The unemployment rate in December fell to 5.9%, just above the prepandemic, February 2020 mark of 5.7%. Expectations were for the jobless rate to remain unchanged from the previous month at 6.0%.
December marked the seventh straight month the jobless rate declined. In May of last year, the unemployment rate was 8.2%.
When calculated using U.S. Labor Department methodology, Canada's unemployment rate in December was 4.7%. The U.S. jobless rate is now at 3.9%, per December data also released Friday.
Desjardins Securities chief economist Jimmy Jean said December's results for Canada were strong, although a good chunk, if not all, of the gains will be given back in the January report due to new Omicron-fueled economic restrictions. Mr. Jean said that won't stop the Bank of Canada from proceeding with interest-rate increases in the first half of this year, as central bank officials recognize labor-market strength and express increasing discomfort with the annual inflation rate at a 18-year high.
"We think the Bank of Canada will stop short of hiking" at its next meeting on Jan. 26, "but will make it abundantly clear that the moment is approaching," Mr. Jean said.
The construction and education sectors were tops in hiring in December.
On a one-year basis, Statistics Canada said Canada added 886,000 net new jobs, or an increase of 4.8%. Early in the Covid-19 pandemic, in the spring of 2020, the economy shed roughly three million jobs. Three-quarters of annual job gains were full-time positions.
Write to Paul Vieira at paul.vieira@wsj.com
(END) Dow Jones Newswires
01-07-22 0940ET
