- In December, employment was unchanged, adding a final month to a quarter in which job growth in Canada flatlined. The unemployment rate remained fixed at 5.8 per cent.
- Among the goods-producing industries, employment fell in construction, manufacturing, and agriculture. Meanwhile, in the service economy, notable growth occurred in professional, scientific, and technical services with smaller increases in other services (except public administration) as well as healthcare and social assistance. Among the services, wholesale and retail trade posted the largest employment decrease.
- Across Canada, employment rose in four provinces. Gains were recorded in British Columbia (+18,000), Alberta (+6,700). Saskatchewan (+4,800) and Nova Scotia (+6,300). However, these were offset by a decrease in Ontario (-48,000). In the remaining provinces, employment was essentially unchanged.
- Average hourly wage growth accelerated in December. On an annual basis, wages rose by 5.4 per cent, the fastest pace in over a year.
Key Insights
December’s LFS report ends a rollercoaster year that opened with a bang and closed with a whimper. This month’s numbers were predictably muted. Slow economic growth is weighing on employment gains. Looking ahead, we anticipate further weakness in the job market as hiring activity remains subdued. Both Canada’s job vacancy rate and our own Canadian Hiring Index are trending down. As the economic torpor continues, the risk of more layoffs is rising. In 2024, elevated borrowing costs will continue to constrain consumption and investment growth, weighing on demand for workers, particularly in the private sector. With international migration feeding labour force growth, we expect to see further increases in the unemployment rate over the first half of 2024.
The pendulum has swung in the labour market and today, the bargaining position of Canadian workers is considerably weaker than a year ago. As the labour market continues to slacken and inflation expectations among businesses