Canada jobs report points to uneven labor market recovery – RBC Economics
|Rather than signaling a setback, December's modest employment gain and rising unemployment rate reinforce our view that Canada's labor market recovery is underway but will likely prove choppy, with slack absorbed only gradually over time, Royal Bank of Canada Senior Economist Claire Fan reports.
December employment gains modest as unemployment rises
"Employment grew by just 8,000 in December, following a robust 181,000 increase over the prior three months. The unemployment rate rose to 6.8% from 6.5%, driven primarily by a jump in the share of the population looking for work rather than an increase in layoffs. Even at 6.8%, the rate remains below October's 6.9% and September's recent peak of 7.1%."
"Trade-exposed sectors, particularly manufacturing and transport and warehousing, experienced persistent job losses over the summer but showed stabilizing conditions by year-end. In December, combined employment in these two sectors was essentially flat month-over-month and 22,000 above December 2024 levels."
"Overall, this report signals gradual improvement in the Canadian labor market backdrop that aligns well with Bank of Canada expectations, and supports their near-term holding bias. We expect the central bank will hold rates steady this year before hiking in 2027."
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.