Canada job gains miss forecast, jobless rate

steady at 5.8%

Randy Thanthong-Knight, Bloomberg

Canada’s labour market missed expectations for jobs gains, confirming a marked slowing of the economy at the end of last year.

The country added about 100 positions in December, while the unemployment rate held steady at 5.8 per cent, Statistics Canada reported Friday in Ottawa. The figures missed expectations for a gain of 15,000 positions but beat a jobless rate of 5.9 per cent, according to the median estimate in a Bloomberg survey of economists.

Canada has one of the world’s fastest rates of population growth because of high levels of immigration. But employment growth has been slower than the expansion of the labour force in recent months.

Overall, the report shows an economy in which growth is being constrained by high borrowing costs, cooling demand. That gives policymakers some room to consider lowering interest rates in the coming months, though faster wage growth may keep them from talking about easing anytime soon.

Wage growth for permanent employees accelerated to 5.7 per cent, higher than expectations for a 5.4 per cent rise, and up from 5 per cent a month earlier. That’s the strongest pace since January 2021.

The population aged 15 and older grew by 74,000 in December, on par with average monthly population growth in 2023 of 79,000. On the other hand, employment growth slowed in the second half of 2023, averaging 23,000 per month, compared with the average of 48,000 during the first six months.

As population growth outpaced job gains, the employment rate — the proportion of the working-age population who are employed — trended down over the past year. It fell 0.2 percentage points to 61.6 per cent in December, the fifth decline in the past six months, and was down 0.9 percentage points from its recent high of 62.5 per cent in January 2023.

Last year, the economy averaged about 36,000 new jobs per month, yet the unemployment rate rose 0.8 percentage points — highlighting how quickly the pool of workers is growing.

Total hours worked rose 0.4 per cent on a monthly basis in December, and were up 1.7 per cent from a year earlier. Although that points to relatively strong economic momentum at the end of 2023, it followed a 0.7 per cent month-over-month drop in November. Economists surveyed by Bloomberg expect gross domestic product to expand at a 0.4 per cent annualized rate in the fourth quarter.

This is the only jobs report before the first rate decision of this year by the Bank of Canada on Jan. 24.

All 29 forecasters in a Bloomberg survey expect the central bank to keep the overnight rate unchanged for a fourth consecutive meeting at 5 per cent, which is seen as the likely end point in this tightening cycle. Markets and economists see rate cuts by mid-2024.

The participation rate fell 0.2 percentage points to 65.4 per cent in December. That’s down from a recent peak of 65.7 per cent in June, and most of the decline was due to a drop in the youth participation rate.

Job gains were led by professional, scientific and technical services, as well as health care and social assistance. Wholesale and retail trade saw the biggest job losses, suggesting a slowdown in consumption. December is the third consecutive month where employment fell in this sector.

Regionally, employment rose in British Columbia, Nova Scotia, Saskatchewan and Newfoundland and Labrador, while it fell in Ontario and was little changed in the other provinces.

Jobs data shows gig economy growing, drivers up nearly 50%

Ben Cousins, BNN Bloomberg

More Canadians are turning to ride-sharing or food delivery apps as a source of income, according to the latest data on Canada’s job market.

Statistics Canada’s Labour Force Survey for December, released Friday, showed 135,000 Canadians between the ages of 16 and 69 provided ride-sharing services in 2023, an increase of 48.1 per cent compared to 2022.

Meanwhile, the number of people who provided delivery services through apps climbed 19.2 per cent from the previous year to 272,000 people.

“In 2023, digital platforms and apps continued to offer Canadians a convenient way of accessing personal transport and delivery services, while also making it possible for individuals to earn income by performing the associated work activities,” the report states.

A whopping 49.9 per cent of people providing app-based transportation and delivery services were located in Canada’s three biggest metropolitan regions: Toronto, Vancouver and Montreal.

New Canadians are also more likely to take up gig work, as 57.5 per cent of those who worked for either ride sharing or delivery apps were new immigrants, while 70.5 per cent of gig workers belonged to racialized groups.

Unemployment rose for most racialized

populations in 2023: StatCan

BNN Bloomberg

The unemployment rate for most of Canada’s racialized populations grew in 2023, according to Statistics Canada.

The federal agency’s December report on the country’s labour force, released Friday, looked at unemployment across different racial groups.

It noted that as of December, people belonging to racialized groups accounted for just over 30 per cent of Canada’s labour force, a sight increase from 28.5 per cent a year earlier, while unemployment went up for a number of those groups.  

“As the tightness of the labour market eased in 2023, the unemployment rate increased for most racialized groups,” the report said.

As of December, the unemployment rate for Black Canadians between the ages of 25 to 54 rose 1.6 percentage points to 8.5 per cent from the previous year, the report said.

For South Asian Canadians in the same age range, the unemployment rate rose 0.8 percentage points to 5.7 per cent.

Meanwhile, the unemployment rate for Chinese Canadians was little changed from 12 months earlier, at 5.1 per cent, StatCan said.