Canada’s unemployment rate stayed at its 43-year low of 5.6% last month as the economy closed out 2018 with the addition of 9,300 net new jobs, Statistics Canada (StatsCan) reported on Friday.
For the second straight month, the jobless rate was at its lowest level since StatsCan started measuring comparable data in January 1976.
Economists had expected the addition of 5,500 jobs in December and an unemployment rate of 5.7%, according to Thomson Reuters Eikon.
But even in a tightened job market, the latest labour force survey shows wage growth delivered another weak reading in December of 1.49% — well below inflation.
Year-over-year average hourly wage growth for permanent employees was 1.46% in November and has decelerated steadily since peaking at 3.9% in May 2018.
Still, recent readings on job creation suggest that incomes are holding up well despite households having to contend with the pinch from higher interest rates, noted Royce Mendes, director and senior economist at Canadian Imperial Bank of Commerce, in a report. If such momentum can continue and wages heat up a bit, “consumers should still do their fair share to support GDP growth in 2019,” he said.
The December result follows a gain of 94,100 net jobs in November, the country’s largest monthly increase since March 2012.
In the jobs report Friday, the overall employment gain of 9,300 for December was deemed too low by StatsCan to be statistically significant. But a closer look revealed some important changes.
Alberta, which has been hit hard by a drop in oil prices, saw a net decrease last month of 16,900 jobs, or 0.7%, compared with November as an increase in part-time work was far outweighed by a loss of 36,200 full-time positions.
For all of 2018, employment in Alberta rose by 0.9% as the province added 21,600 jobs. The provincial unemployment rate fell to 6.4% at the end of the year from 7% at the start of 201 .
Across Canada, StatsCan reported the country gained 163,300 net new jobs in 2018 for an increase of 0.9%, which was a slower pace of growth compared with 2.3% in 2017 and 1.2% in 2016.
Employment growth in 2018 was concentrated in the services sectors, which generated 151,000 positions compared to an increase of just 12,300 in goods-producing industries.
In 2018, employment for women aged 25 to 54 grew by 125,600 positions, or 2.2%, compared with an increase of 60,600 jobs or 1% for men in the same age category.
The report Friday was the first major economic data release of 2019.
The Bank of Canada has been monitoring wage growth ahead of its interest-rate decisions as it tries to determine how well indebted households can absorb higher borrowing costs.
The central bank, which will make a rate announcement next Wednesday, has raised its benchmark rate five times since the summer of 2017 in response to Canada’s strong economic performance. Governor Stephen Poloz has signalled that more increases will be needed to prevent inflation from rising too high.