The official data revealed on Friday that the unemployment rate in Canada dropped to 5.6% in December. The Canadian job market was also highlighted to have added 35,200 new positions to end the last year.
In a previous estimate, analysts had expected the employment change to remain capped at 25,000 in December. The unemployment rate, on the other hand, was expected to drop to a slightly higher 5.8% instead. According to Statistics Canada’s data on Friday, permanent employees saw an increment of 3.8% in wages in December. In the two months prior to December, however, the gain in wages was reported at a much higher 4.4%.
National Participation Rate Dropped To 65.5% In December
Friday’s economic data further showed the national participation rate to have marginally declined from November’s 65.6% to 65.5% in December. Two of the largest Canadian provinces, Quebec and Ontario contributed the most to the employment gains in December.
In November, as massive 71,200 net jobs were reported to have been shed in Canada. The drop was marked the sharpest for the decade. The unemployment rate, on the other hand, was announced at 5.9% in November.
Statistics Canada also revealed that December saw a gain of 38,400 full-time positions. Shedding 3,200 part-time jobs, however, the overall figure was noted at 35,200 for December. In terms of distribution on the basis of sectors, good producing industries added 15,700 new positions in Canada in December while the services sector posted a much larger 19,400 added jobs last month.
Canada Has Avoided Rate Cut Since October 2018
The last rate cut from the Bank of Canada (BoC) was announced in October 2018. In over a year, Canada has refrained from adding any further leniency in the monetary policy despite its counterparts like the United States opting for three consecutive rate cuts in 2019. Canada’s central bank is expected to announce its next decision regarding the monetary policy on January 22nd. On Thursday, BoC Governor Stephen Poloz was reported quoting that the bank is likely to base its decision regarding the monetary policy on the employment change and unemployment reports for December. The Governor, however, did highlight the mixed economic data that has recently hit the Canadian economy.
Following Friday’s economic data, the Canadian dollar was seen gaining strength in the forex market. USD/CAD dropped from a daily high of 1.3103 to a low of 1.3028. The currency pair closed the week at 1.3050.