The Canadian economy created only 9,300 new jobs in December, according to the labour force survey (LFS). Canada’s economy shed 18,900 full-time jobs in December, while part-time positions expanded by 28,300.

While December’s job growth was very tiny, keep in mind that it followed a huge 94,000 increase in November. In fact, in the fourth quarter of 2018, the job creation pace averaged 38,000 per month, which provided an impressive finish to last year.  

The unemployment rate remained unchanged at its more than 40-year low level of 5.6% in December, while average hourly wages increased slightly to a 2% y/y pace from 1.7% in the previous month.

Canadian wage increases continue to be very low which confirms that no real improvement in labour’s purchasing power occurred last year, despite the expanding job market.    

As noted before, there is always a huge variation in monthly LFS data, so there is not too much useful insight to be gained from dissecting the December numbers.  

Nonetheless, it is interesting that Canada created 23,900 jobs in manufacturing in the same month that GM announced its plans to close its Oshawa plant. At the same time service sector jobs contracted by 13,300 in December following a huge surge in the previous month.

It is also interesting to note that Ontario’s 18,000 monthly job gain in December far outpaced the other provinces. BC and Quebec each created 4000 new jobs in December, while Alberta posted a sizable decline in jobs.

Indeed, while total employment in Alberta fell by 17,000 in December, on a longer-term trend basis, overall employment in the province has been increasing since June 2016. In December, the unemployment rate in Alberta was little changed at 6.4%.

While the Canadian economy created 163,000 new jobs in 2018, nonetheless the 0.9% expansion was slow when compared with the 2.3% growth in 2017 and the 1.2% in 2016. Indeed, the job growth in 2018 was the lowest yearly increase since 2015.

Moreover, it is widely recognized that the outlook for the Canadian economy weakened sharply in recent months, so even the less than 1% growth in jobs in 2018 may not be repeated in 2019.

Finally, even though the Bank of Canada has raised interest rates five times since July 2017, it probably will choose not to tighten at its January 9th meeting.   

Employment In Alberta