Canadian economy created 39,800 jobs in December, right after the stunning 59,300 increase from the previous month.
Canada’s employment is not just defying expectations, it appears to be defying gravity, according to BMO Economics.
Based on the December results and the ongoing trends, Douglas Porter, deputy chief economist, BMO projects conitued job growth in 2013, albeit at a slightly slower rate than 2012, led by Saskatchewan, Alberta and BC.
Ontario will do better than last year on the back of an uptick in the U.S. economy, he adds.
“The Canadian labour market finished 2012 in fine fashion, posting solid job gains in four of the last five months and driving the jobless rate to its lowest ebb in four years,” says Porter. “The steady job gains hint that there is a bit more underlying vigour in the economy than many other reports would suggest, especially in Ontario, which is likely benefitting from the gradual U.S. turnaround.”
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For the Bank of Canada, however, the drop in the jobless rate to a cycle low of 7.1% will raise a few eyebrows.
“Wages are restrained and with inflation around 1%, the Bank of Canada can remain quite patient, he said. “We still expect no rate changes in 2013.”
A variety of industries saw strength in the month, with strong increases for transportation and warehousing, construction, healthcare, trade and manufacturing.
“After leading the charge in the prior month – probably thanks to the Grey Cup festivities in Toronto – the hotel and restaurant sector was flat, but that was also better than the expected reversal,” says Porter.
According to the BMO Hiring Outlook Report, for business owners planning to invest more in 2013, hiring employees is a top priority, second only to upgrading and purchasing equipment.
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Regionally, seven of the 10 provinces reported job gains, with Ontario leading the way with a gain of 33,000 jobs in December, following a similar increase in November.
Most of the other provinces posted gains or were little changed for the month.
Manitoba posted an increase of 5,200, Saskatchewan added 4,000 and Newfoundland and Labrador increased by 2,700.
Prince Edward Island added 1,300 jobs, while New Brunswick, Alberta, Quebec and British Columbia were little changed for the month.
The gains were made in the transportation and warehousing segment, which added 22,000 jobs, while the construction industry gained 18,000 jobs.