In a surprising turn of events, Canada has reported a significant surge in job growth for December, adding a staggering 91,000 jobs and pushing the unemployment rate down to 6.7%. This unexpected increase comes amidst ongoing discussions about potential economic slowdowns and has been viewed as a strong indicator of the resilience of the Canadian labor market.

According to Statistics Canada, the job additions included 40,000 positions in the public sector, 27,000 in the private sector, and 24,000 attributed to self-employment. Notably, out of these new jobs, 56,000 were full-time roles, offering a much-needed boost in job stability for numerous Canadians.

This marked the third positive jobs report in four months, representing the largest single-month increase since January 2023 when the economy added 150,000 jobs. Economists had predicted a more modest gain of around 25,000 jobs and expected the unemployment rate to rise to 6.9%. The most recent data shows a continued recovery post-pandemic, as the economic landscape seems to be bouncing back more robustly than anticipated.

James Orlando, a senior economist at Toronto-Dominion Bank, remarked, “This was as positive a labour market report as we could expect. Despite all the negative talk on Canada’s economy, the country keeps adding jobs.” In fact, the December gains helped reduce the unemployment rate from 6.8% the previous month, though it remains 1 percentage point higher compared to the same time last year.

Douglas Porter, chief economist at the Bank of Montreal, stated that the job market ended 2024 on a positive note, suggesting that the broader economy might be recovering. However, he cautioned against drawing too many conclusions from a single report, noting the volatility often present in the Labour Force Survey data.

Furthermore, the Bank of Canada is navigating a complex economic landscape, recently indicating that rate cuts will be more measured moving forward. The current policy rate stands at 3.25%, with forecasts suggesting it could fall closer to 2% by year-end. Despite this, external threats loom large, including potential tariffs from the incoming U.S. administration that could create instability for Canadian exports.

Industries leading the employment gains included educational services, transportation and warehousing, financial and real estate services, and healthcare and social assistance. On a year-over-year basis, there was a notable increase of 156,000 jobs in the public sector and 191,000 in the private sector, with healthcare and education sectors contributing significantly to overall employment growth.

The youth unemployment rate, however, saw an uptick of 0.5% to 14.4%, reflecting ongoing challenges for younger job seekers as they enter the workforce. Average hourly wages also showed a year-over-year growth of 3.8%, although this is the slowest pace observed since May 2022.

As Canada forges ahead, the labor market continues to reveal positive signs amid external economic pressures. Many will be watching closely to see how these trends evolve in the coming months, especially in light of potential changes in the U.S. political landscape that could impact trade and job growth. Stay tuned for more updates as Canada navigates these dynamic economic challenges!