Good news for Canada’s workforce! Canada’s unemployment rate is at the lowest it has been in years. 5.6% low to be more precise. The news comes as the increase in job numbers in November beat expectations by a long shot.
Canada’s Unemployment Rate
The country added 94,000 new jobs last month and in doing so knocked its unemployment rate to the lowest level it has been in over 40 years. Analysts had predicted only 11,000 new jobs. That’s quite the miscalculation if you ask me.
It was the private sector that brought the new jobs, creating almost 86,000 of them. The Public sector gained 8,300 jobs.
Not All Good
However, the news is not entirely positive. While job numbers have increased, wages have not. The hourly wage growth for permanent employees has declined to 1.46% in November. This is the weakest reading since July 2017.
It has been expected to rise considering the tightened labor market. However, it has dropped since its peak in May of 3.9%.
Bank of Canada
Unfortunately, The Bank of Canada relies heavily on wages to decide on appropriate interest rates. As such, it has hiked interest rates five times since July 2017. This decision is also reflective of other economic negatives, such as weaker-than-expected business investment and the sharp drop in oil prices.
However, despite the report showing that wage growth has declined, on Wednesday, the central bank held its benchmark rate at 1.75%.
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Perhaps the increase in job numbers offset the concern over wage hikes.
Statistics Canada has said that overall, employment numbers have shown “a performance that should help ease the Bank of Canada’s worries about a recent economic slowdown.”
BMO Weighs In
On the news, Sal Guatieri, a senior economist with BMO Capital Markets, said the numbers were “just off the charts.” However, they also predict job growth will slow down in the coming months.
He furthered that, the data “makes the Bank of Canada rate decision a little more interesting, but we still don’t think they will move as early as January.”
The US has also shown a massive increase in job numbers in recent months off the back of an economic boom.
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