TORONTO (Reuters) – Canada’s economy gained a net 100 jobs in December, entirely in part-time work, and the jobless rate held at 5.8%, Statistics Canada data showed on Friday.
Employment in the goods producing sector fell by a net 42,900 jobs, largely in manufacturing. The services sector was up by a net 43,100 positions, mostly in professional, scientific and technical services, as well as health care and social assistance.
MARKET REACTION: CAD/
DEREK HOLT, VICE PRESIDENT OF CAPITAL MARKETS ECONOMICS AT SCOTIABANK
“The data matches the U.S. side when they had an acceleration of wages, so we had a hot growth of wages on both sides of the border. I think with wage numbers like this, the Bank of Canada will remain concerned about the inflation risk being still slanted to the upside particularly given the weak productivity. So I think markets are still aggressive in pricing cuts as soon as the March or April meetings.”
SIMON HARVEY, HEAD OF FX ANALYSIS FOR MONEX EUROPE AND MONEX CANADA
“December’s jobs report provides yet another uninspiring data point on the Canadian economy. Net employment essentially flat-lined even as the population grew by 74k, dragging the overall employment rate lower for the fifth time in six months. However, the unemployment rate paused its 6-month ascent for only the second time as the increase in population was essentially neutralized by a drop in the participation rate. This is inconsistent with the view that both underlying inflation and wage growth remains elevated, both of which would theoretically support labour supply increasing. It is instead more symptomatic of a weaker underlying economy.”
ANDREW GRANTHAM, SENIOR ECONOMIST, CIBC CAPITAL MARKETS
“This is a classic mixed bag report with some stronger than expected news – hours worked, wages – and some weaker – employment, participation – and because of that we continue to forecast a first interest rate cut from the Bank of Canada in June this year.”
DOUG PORTER, CHIEF ECONOMIST, BMO CAPITAL MARKETS
“The main story here is we are seeing some cool down in the job market. It’s been erratic for sure over the last year but this does fit with the broader narrative that the economy is slowing and is struggling to grow.”
“Up until this month we had seen decent job gains even in very slow economic growth but it looks like maybe that slowdown in the broader economy has caught up with the job market, at least for this month.”
“For the Bank of Canada, they are not going to read that much into one monthly number. I guess the one disturbing aspect for the bank is that average hourly wages took a big step up in the month. Again, this can be a bouncy series but the fact that wages are picking up and not slowing down I think will be of some concern to the bank.”
(Reporting by Fergal Smith, Divya Rajagopal; Editing by Denny Thomas)