By Robb M. Stewart
OTTAWA--Flat hiring in Canada last month despite continued strong population growth left the country's jobless rate steady as signs build the labor market continues to loosen.
Still, any comfort the central bank might take from the latest data may be tempered by the strongest rise in wages in almost three years.
The number of employed working-aged people in Canada was effectively unchanged in December from the month before, while the unemployment rate held at 5.8%, Statistics Canada reported Friday. The pace for the months was cooler than market expectations were for hiring to add a modest 15,000 jobs and an unemployment rate one tick higher at 5.9%.
The rate of employment in the country trended lower over the course of the year and the jobless rate had increased in five of the last seven months through November, edging up from the record low 4.9% seen in mid-2022.
Hiring has failed to keep up with Canada's growing labor force in recent months as economic growth has faltered.
Employment growth averaged 23,000 a month in the second half of 2023, slightly less than half the monthly average in the first half, while the population aged 15 and older grew by 75,000 in December and averaged about 79,000 a month for the year. The proportion of the working-age population who are employment fell for a fifth time in the last six months with a dip of 0.2 percentage point to 61.6% last month.
Unchanged unemployment for the latest month came with a loss of 23,500 full-time jobs, roughly balanced by the addition of 23,600 part-time roles, the data agency said. There were 1.2 million unemployed in Canada in December, an increase of 19.3% from a year earlier.
When calculated using U.S. Labor Department methodology, Canada's unemployment rate in December was steady at 4.7%. In the U.S., hiring picked up in December with 216,000 jobs added and the unemployment rate held at 3.7%, the Labor Department said.
For the Bank of Canada, which has expressed concerns about sticky wage growth, it may find worrying a 5.7% jump in average hourly wages for permanent employees, the biggest annual increase since January 2021. The central bank, which next decides on interest rates Jan. 24, is looking for signals its past aggressive rate increases have done enough to tame inflation even as it projects economic growth will remain subdued near-term after a contraction on an annualized basis in the third quarter of the year.
Total hours worked rose 0.4% on-month, and were up 1.7% compared with a year earlier, Statistics Canada said.
With the little employment growth and unchanged unemployment last month, the labor-force participation rate--the proportion of the working-age population who were either employed or unemployed--edged down 0.2 points on the month before to 65.4%. The rate has fallen from a recent peak of 65.7% in June, with most of the decline since June attributed to a drop in the youth participation rate.
The ranks of the self-employed thinned last month, while the number of public- and private-sector employees rose modestly.
The agency's survey found employment rose in professional, scientific and technical services, after little change the previous three months, and also increase in health care and social assistance, but jobs fell in wholesale and retail trade for a third consecutive month.
Write to Robb M. Stewart robb.stewart@wsj.com
(END) Dow Jones Newswires
01-05-24 0901ET
