For newcomers arriving in Canada looking for jobs, the good news is that the country’s labour market added 104,000 jobs in December.
This surprise marks the third decline in the unemployment rate in four months, bringing it closer to the record-low of 4.9 percent reached in June and July.
Job trend shows no sign of slowing soon
And while it’s unknown at this point what 2023 will hold, the trend is impressive, says Scotiabank’s Derek Holt
“Canada now has 627,000 more jobs than it did before the pandemic struck, and 222,000 of those jobs came in the fourth quarter of 2022,” he said.
So far, this trend shows no real signs of slowing, as numerous economists had predicted.
More hiring expected in 2023
Holt says that a majority of Canadian companies “continue to signal” that they plan to hire more workers in 2023 than firms saying they plan to enact layoffs.
He cautions, however, that the robust numbers mask a “moribund performance on labour productivity as the cost to this explosive growth.”
Surprisingly, the unemployment rate also fell unexpectedly to 5 percent from 5.1 percent in November. Experts were expecting a minimal increase.
Full-time work was on the rise
The unemployment number was primarily due to a rise in full-time work (among youth aged 15 to 24). According to Statscan, it was spread across industries.
Employment in the public sector also held steady.
It is the third decline in the unemployment rate in the past fourth months. The record-low of 4.9 percent was reached in June and July of 2022.
Spectacular stats will prompt a rate hike
Also in December, the average hourly wage for permanent employees rose 5.2 percent on a year-over-year basis. That’s down from 5.4 percent in November.
Most experts agree that the “spectacular” jobless stats will result in another interest rate hike, expected on Jan. 25.
The Bank of Canada has hiked its key interest rate seven consecutive times since March 2022. It now sits at 4.25 percent. The Bank’s strategy is that higher borrowing costs will slow spending in the economy and impact the speed of price growth.
Fears of recession now in doubt
“For those of us who are calling for at least a shallow recession this year, it of course raises some doubts on that view,” Douglas Porter, BMO’s chief economist, told Nojoud Al Mallees of the Canadian Press.
Brendon Bernard, a senior economist with hiring website Indeed, told Canadian Press that the broad story for 2022 “of low unemployment and solid job market conditions continued through the final parts of the year.”
Other highlights from the Statscan report include:
- Wages continued to grow at a year-over-year pace above 5.0 percent for the seventh consecutive month, with wages up 5.1 percent.
- Wage growth still lags behind the country’s inflation rate, which stood at 6.8 percent in November.
- Employment among youth aged 15 to 24 rose in December, entirely making up for job losses experienced between July and September.
- The employment rate among women between the ages of 25 and 54 hit a record high last month.
- Despite employment rising every month, hours worked held steady in December.
- Statistics Canada reported 8.1 percent of employees were absent due to illness or disability last month, up from 6.8 percent in November.
The strength of the labour market has fuelled some optimism that the expected economic slowdown may be less painful than a typical recession.
In other good news for newcomers arriving in Canada to work, according to Statistics Canada, the country’s working population (persons aged 15 to 64) has never been older, reports Vival Sivakumar reports for CIC News.
Increased retirements will help newcomers
More than 20 percent of people that Canada categorizes as being of working age are between the ages of 55 and 64, which means they could be close to retirement. Meanwhile, most of Canada’s recent immigrants are between the ages of 25 and 54.
Because most recent newcomers are of core working age means that they will likely be an even bigger part of Canada’s shrinking workforce in the future.
Canada set an immigration record in 2022 with 430,000 new permanent residents.
Canada hopes to land 465,000 new immigrants in 2023. That number will rise to 485,000 newcomers in 2024 and will jump in 2025 to 500,000 new arrivals.