The Conference Board of Canada’s Senior Economist Cory Renner offers the following insights on today’s Labour Force Survey (LFS):
While it’s good to see the job market recover in December, the increase shouldn’t be overstated. Canada’s job market lost 71,200 last month. Decembers gain was less than half that amount. Wage growth also weakened significantly this month, which has been one of the labour market’s key areas of strength lately. Overall, Canada’s labour market had an incredible 2019, but concerns remain due to the labour market’s performance being notably worse in the second half of the year.
- Employment rose by 35,200 in December. The increase was supported by full-time employment, which rose by 38,400. Part-time employment fell by 3,200.
- While it’s good to see a recovery after the loss of 71,200 jobs in November, employment is still 36,000 below where it was in October.
- From a broader perspective, December’s increase caps off a great year for job growth. Canada’s labour market added 320,300 in 2019 (December 2018 to December 2019). It is concerning, though, that job growth was notably weaker in the second half of the year.
- In respect to Decembers gain, most of the employment gains came from Quebec (+21,100) and Ontario (+25,100). New Brunswick and P.E.I were the only other province to see an increase. Meanwhile, employment fell in British Columbia (–7,700) and Saskatchewan (–2,100).
- By industry, job growth was strongest in construction (+17,00), accommodation and food services (+24,900) and health care (+6,500).
- More notably, after a large decline last month, both manufacturing and public administration saw little recovery.
- The labour force participation rate fell to 65.5 per cent in December, its third straight month of decline. It is now at its lowest level since last December. Consequently, the labour force fell by 16,400 in December. This is somewhat worrying given that Canada’s job gains in 2019 depended heavily on good labour force growth.
- With a smaller labour force and solid job gains, the unemployment rate fell to 5.6 per cent.
- The most negative news this month came from the fall in year-over-year hourly wages. After Decembers decline, wages have risen 3.6 per cent over the last year. Although this is still a solid increase and well above inflation, it is well below the 4.5 per cent year-over-year growth seen in November.
- Overall, the modest job recovery in this month’s labour force survey is good news, but other details paint a bleaker picture. The labour market recovered less than half the jobs lost in November and wage growth weakened. As a result, the job gains in this report are not enough to counter the string of bad news from other recent data releases, such as trade and retail sales.
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