OTTAWA — Canada’s economy added 55,000 jobs in December before COVID-19 cases began to rise at the end of the month, prompting public health restrictions that forced many businesses to shut down or scale back operations. .
OTTAWA — Canada’s economy added 55,000 jobs in December before COVID-19 cases began to rise at the end of the month, prompting public health restrictions that forced many businesses to shut down or scale back operations. .
Dominique Lapointe, senior economist at Laurentian Bank Securities, said the report provides a snapshot of the economy before the Omicron variant.
“It has to be taken with a grain of salt, but what it’s saying is that before the variant, the job situation was really strong,” he said.
“The overall report shows double the employment gains we expected.”
The report was based on the results of a survey conducted during the week of December 5-11, before public health restrictions were put in place to slow the latest surge in COVID-19 cases.
The highly transmissible variant of Omicron has fueled a record spike in COVID-19 cases with daily increases in new cases in the tens of thousands in recent days.
In its Labor Force Survey, Statistics Canada said the unemployment rate edged down to 5.9% from 6.0% in November.
It was the lowest unemployment rate since February 2020 before the pandemic, when it was 5.7% and half a percentage point from the record low of 5.4% set in May. 2019.
Statistics Canada also said employment numbers were up 886,000 from December 2020 and 240,500 from February 2020 before the pandemic.
The jobs report preceded the Bank of Canada’s rate decision and monetary policy report on January 26. The central bank is expected to start raising its key interest rate target later this year.
Last month, as part of the renewal of its monetary policy framework agreement with the federal government, the Bank of Canada agreed to maintain the central bank’s inflation target range of 1-3%, but also to monitor more formally the labor market when it pays interest tariff decisions.
Lapointe said the December jobs report suggests the economy was close to full employment.
“This is something the Bank of Canada was looking for before they started raising interest rates,” he said.
Lapointe expects the central bank to wait until April before starting to raise interest rates, but added there’s a chance it could do so sooner.
“Because of the uncertainty around the variant, we think it’s a bit premature to start raising rates as early as two weeks from now,” he said, adding that Statistics Canada will release its next report on the rate. inflation on January 19 before the central bank’s decision. interest rate decision.
Lapointe said he expects the inflation report to show that the annual pace of price increases will reach 5% or maybe just a little above that mark.
TD Bank senior economist Sri Thanabalasingam said the employment increase for December was well above the consensus call for a gain of 25,000 jobs for the month.
“With the number of daily cases increasing at an incredible rate and provinces tightening the screws on mobility, January’s labor market numbers are likely to be lower,” Thanabalasingam wrote in a report.
“Hopefully the impact of Omicron will be short-lived, allowing the labor market to recover quickly in the months ahead.”
The overall increase in employment in December was attributable to a gain of 123,000 full-time jobs, while part-time employment fell by 68,000 during the month.
Employment growth in December was boosted by the construction and educational services industries.
The construction industry added 27,000 jobs for the month, its first increase since August, but the sector still remains 41,000 below its pre-COVID-19 February 2020 mark.
Educational services gained 17,000 jobs in December.
The average hourly wage increased by 2.7% compared to the previous year.
Statistics Canada is due to release its January jobs report on February 4.
This report from The Canadian Press was first published on January 7, 2022.
Craig Wong, The Canadian Press
