Published: Sun, January 06, 2019
Business | By Eloise Houston

Canada's unemployment rate sticks at 43-year low of 5.6 per cent

Canada's unemployment rate sticks at 43-year low of 5.6 per cent

The average year-over-year wage growth of permanent employees - a figure closely watched by the central bank - remained at 1.5 percent in December, the lowest since the 1.2 percent seen in July 2017.

The Bank of Canada has been watching wage growth ahead of its rate decisions as it tries to determine how well-indebted households can absorb higher borrowing costs.

The service industries, including healthcare and social assistance, educational services, transportation and warehousing, and business, building and other support services, were the biggest contributor to employment gains.

The Bank of Canada has raised rates five times since July 2017 as the economy strengthens but analysts say there is no chance it will tighten again on January 9.

Economists had expected about 5,500 new jobs and an unemployment rate of 5.7 per cent.

Governor Stephen Poloz has signalled that more increases will be needed to prevent inflation from rising too high.

The national agency said the country added 9,300 net new jobs in December, coming on a gain of 28,300 part-time positions and a drop of 18,900 full-time jobs.

"Without bottom-up wage pressure, further monetary tightening is clearly not urgent".

Data released on Friday by Statistics Canada said "overall employment in the province has been increasing since June 2016".

The West Coast was second only to Ontario (+17,600) in terms of gains among provinces, while Alberta was cut deep with job losses mounting to 16,900. This follows a net gain of 5,500 positions in November, which knocked the unemployment rate down by 0.7 points.

The unemployment rate in December was 4.7 percent compared to 4.3 percent in November of 2018.

In 2018, employment for women aged 25 to 54 grew by 125,600 positions or 2.2 per cent, compared to an increase of 60,600 jobs or one per cent for men in the same age category.

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