Total employment in Canada rose by 91,000 in December, according to Statistics Canada. The majority of the growth came from full-time positions, which saw an increase of 57,500, while part-time jobs also grew by 33,500.
Canada’s employment rate—the percentage of the population over 15 that is employed—rose by 0.2%, marking the first increase since January 2023.
Unemployment decreased by 0.1% to 6.7% in December. The youth employment rate also saw an uptick, rising by half a percent to 14.4%, as more young Canadians sought work during the month.
Sectors experiencing significant job growth included educational services (+17,000 jobs), transportation and warehousing (+17,000 jobs), healthcare (+16,000 jobs), and finance, insurance, real estate, and rental and leasing businesses (+16,000 jobs).
“Despite all the negative talk on Canada’s economy, the country keeps adding jobs. Importantly, these jobs were largely full-time, and in cyclically sensitive industries,” TD Economics’ James Orlando wrote in a research note.
According to Statistics Canada, total hours worked increased by 2.1% year-over-year and rose by 0.5% in December. Average hourly wages also saw a significant rise, up 3.8%, or $1.32, to reach $35.77.
This morning also saw the release of strong employment growth in the U.S., where 256,000 jobs were added in December, beating market forecasts of 160,000.
As a result, both U.S. Treasuries and 10-year bond yields—which influence fixed mortgage rate pricing—surged, with the Government of Canada 5-year bond yield rising over 11 basis points to 3.15%.
As RMG’s VP of Sales, Bruno Valko, pointed out in a morning note, “good economic news is usually bad news for mortgage interest rates.”
“The US 10-year Treasury yield is up 10 bps as well to a new one-year high,” he added. “This will put upward pressure on fixed mortgage rates in the U.S. and Canada.”
Strong job numbers “puts a January rate cut into question”
Economists see the surge in job growth as a potential obstacle to the Bank of Canada’s expected rate cut this month.
As we previously reported, all of the Big Six Banks are calling for at least a quarter-point rate cut this quarter, with half expecting 50 basis points of easing during the Bank of Canada’s upcoming meetings in January and March.
“Today’s report puts a January rate cut into question,” writes Orlando, adding that the Bank of Canada may have enough data post-U.S. Presidential inauguration on January 20 to determine whether lower interest rates are “necessary to shore up the economy.”
BMO’s Douglas Porter also believes these job gains raise “meaningful doubt” about whether the Bank of Canada will proceed with a rate cut in January.
Porter added that the potential threat of tariffs for 2025, along with a weak Canadian dollar and the Fed “moving to the sidelines for a spell,” could also lead the Bank of Canada to hold off on a rate cut.
Bank of Canada Bruno Valko douglas porter economic economic data economic indicators Editor's pick employment figures james orlando jobs data statcan employment Statcan jobs unemployment unemployment rate
Last modified: January 13, 2025
