Ottawa (Rajeev Sharma): Canada’s labour market showed signs of cooling in December as the country added only 8,200 net new jobs, following three months of strong gains, while the unemployment rate rose to 6.8 per cent, according to data released by Statistics Canada on Friday. The increase in unemployment came as more people entered the labour force in search of work.
The figures contrasted with market expectations, as analysts surveyed by Reuters had predicted a loss of around 5,000 jobs and an unemployment rate of 6.6 per cent. Following the data release, the Canadian dollar weakened slightly, trading at 72.05 US cents.
Employment growth in December was driven by full-time positions, which increased by 50,200, while part-time employment declined sharply by 42,000. Despite the modest gain last month, the broader trend showed a slowdown after the economy added 181,000 jobs between September and November. That surge followed a weak start to the year, when hiring remained largely stagnant amid trade uncertainty and the impact of US tariffs.
Sector-wise, health care and social assistance recorded an increase of 20,800 jobs in December, reflecting continued demand in essential services. In contrast, professional, scientific and technical services saw a decline of 18,100 positions, marking the first drop in that sector since August.
Young workers continued to face pressure in the job market, with employment among those aged 15 to 24 falling by one per cent in December after registering gains in the previous two months. Economists have pointed to ongoing economic uncertainty as a key factor affecting youth employment prospects.
Wage growth also showed signs of easing. Average hourly wages for permanent employees rose by 3.7 per cent year-on-year, down from a four per cent increase in November. The metric is closely watched by the Bank of Canada as an indicator of inflationary pressure.
The central bank kept its benchmark interest rate unchanged at 2.25 per cent on December 10, signalling that the current level is appropriate to maintain inflation near its two per cent target. Market expectations suggest interest rates are likely to remain steady for the rest of the year.
