Unemployment rate falls in Canada as country adds 10,000 new jobs
2 min read . Updated: 02 Dec 2022, 07:47 PM IST
PremiumThe unemployment rate fell in Canada to 5.1 per cent as the economy added just 10,100 jobs in November
Canadian employment grew again, but the small gain leaves the Bank of Canada's options open as it heads into its last policy decision of the year.
The economy added just 10,100 jobs in November, while the unemployment rate dipped to 5.1% as the participation rate fell, Statistics Canada reported in Ottawa. The employment gains were in line with the median estimate in a Bloomberg survey, with economists expecting a jobless rate of 5.3%.
Friday’s tepid reading, which follows an increase of 108,000 jobs in October, suggest the nation’s recent rebound from a midyear labor-market slump may have stalled. The number of people working in construction fell by 25,000, reversing gains made in the previous month, while employment in wholesale and retail trade dropped for the fourth time in six months.
Still, with the jobless rate falling back to near record lows and core-age employment still showing momentum, the data will raise questions about how fast Canada's economy is slowing in the face of higher interest rates. Most economists expect the country to enter a technical recession early next year.
Rising wages are one factor putting pressure on Governor Tiff Macklem as the Bank of Canada tries to tamp down inflation. They showed no signs of cooling in November, with average hourly pay up 5.6% from a year earlier -- the same pace as in October. It's the sixth straight month of increases over 5%.
Friday's jobs data are the last key input into the Bank of Canada’s Dec. 7 rate decision.
Earlier this week, the statistics agency said third-quarter gross domestic product nearly doubled expectations with a 2.9% annualized gain. But a flash estimate for October suggested that momentum has stalled. Household consumption is slowing and housing investment has fallen amid rapidly rising borrowing costs.
Macklem and his officials have already begun slowing down the pace of hikes, after increasing the benchmark overnight lending rate to 3.75% from the emergency pandemic low of 0.25% that held until March.
Before the jobs release, overnight swaps markets were fully pricing in a 25 basis-point hike next week, with traders putting about a one-quarter chance on a 50 basis-point move.
Women in their prime working years saw the biggest increase in employment: 81.6% of those aged 25 to 54 have jobs, a record. But the employment rate for younger women and older men declined.
Total hours worked were little changed from the month before, and up 1.8% from the prior year.
This story has been published from a wire agency feed without modifications to the text.
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