The Canadian economy added 35,200 jobs in December, significantly greater than the 25,000 expected by economists. This partially offsets the 71,000 job losses in November’s Statistics Canada labor market survey. The unemployment rate fell by 0.3 percentage points to reach 5.6%, near the historic low of 5.5% last recorded in October of last year.
Source: Statistics Canada
Throughout the year the Canadian economy added 320,300 jobs, which compares quite well to job gains over the past several years. Most of the gains occurred in the services sector, as opposed to the goods-producing sector, which includes primary industries and manufacturing and construction industries. Across Canada, the goods-producing sector lost 47,000 jobs. The manufacturing sector lost 40,100 jobs from December 2018 to December 2019.
Within the services sector, a large proportion of the job gains were in higher-skilled industries led by the professional, scientific and technical services (85,700), healthcare and social assistance (75,400) and finance, insurance, real estate, rental and leasing (74,800) industries. The vast majority of the jobs created throughout the year were in Ontario (243,000) and Quebec (62,900).
Even with the strong job gains to close out 2019, economic growth has decelerated over the past several quarters. Real GDP growth in the third quarter of the year was only 0.3% (1.3% on an annualized basis), which follows some rather underwhelming quarters of economic growth.
The disparity in the jobs versus economic growth data lends credence to the view that Canada’s competitiveness has declined. The next GDP release at the end of February will show if this trend is continuing.