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Canada's job market grew by just 0.9% last year, while unemployment remains at record low

In the 12 months to December, employment increased by 163,000 jobs, or up by 0.9%
Canada's job market grew by just 0.9% last year, while unemployment remains at record low
The job creation number for the month was slightly lower than the figure of 10,000 that economists had expected.

Canada's monthly jobs report out today showed the economy was fairly robust with employment holding steady last month (December) and the jobless rate unchanged.

Those in jobs in Canada totalled 18.8 million in December, up 9,300 jobs on the previous month, while the unemployment rate was 5.6% - unchanged on the month and the lowest on record.

That was better than expected as some economists had expected the unemployment rate in Canada would tick up to 5.7% from 5.6%.

The job creation number was slightly lower than the figure of 10,000 that economists had expected.

Wage growth, however, was disappointing, with growth for December at 1.49% which is well below inflation.

In the 12 months to December, employment increased by 163,000  jobs, or an increase of 0.9%, driven by gains in full-time work. Meanwhile, over the same period, total hours worked rose 0.9%.

However, the pace of employment growth was slower compared with previous years. In 2017, it saw 2.3% of growth and in 2016, it was 1.2%.

Breaking the figures down by industries, last month, 24,000 more people were employed in manufacturing, with the bulk of the increase in Ontario and Alberta.

Employment in transportation and warehousing rose by 15,000 jobs, continuing an upward trend that began in early 2016. The bulk of the increase in December was in Ontario.

There were also job gains in health care and social assistance, with 11,000 more people working in the industry last month. Again, most of the gains were in Ontario - the country’s most populous province accounting for 28% of the overall population.

Conversely, 26,000 fewer people were working in wholesale and retail trade, most notably in Ontario.

Employment in public administration was down 17,000 in December, with declines in Ontario, Alberta and Nova Scotia.

Analysts at banking giant ING noted that Canadian wage growth failed to pick up in December, which coupled with other global risk factors, meant the Bank of Canada is likely to side with caution and push back the next rate hike until March.

"A rate hike later in the first quarter (in March) still could be on the cards, unless the risk environment worsens further," it said."This would allow policymakers a bit more time to evaluate the impact of lower energy prices on growth, as well as whether business investment and wage growth have begun to perform more strongly."

Contact Giles at [email protected]

Follow him on Twitter at @Gile74

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