Amazing news from Canada today! The latest data reveals that the Canadian economy is thriving, with an impressive surge in job growth during the month of November. Although the jobless rate saw a slight increase, this is no cause for concern as it is in line with the central bank’s decision to maintain interest rates at their current levels next week. This is fantastic news for the Canadian economy and a clear indication of the country’s continued progress and success.
Canada added 24,900 jobs in November, while the jobless rate slightly increased to 5.8%. Although employment is still rising, it’s not keeping up with the rapid labor force growth. The Bank of Canada is expected to stay on hold next week.
The loonie, as Canadian currency is colloquially known, saw a modest gain of 0.2%, trading at 1.3530 against the USD, which translates to 73.91 U.S. cents. Meanwhile, the average hourly wage for permanent employees, a crucial metric monitored closely by the Bank of Canada, increased by 5.0% in November 2022. This is the same rate as the annual rise recorded in October. The jobs report, the latest significant economic data, was released before the upcoming Bank of Canada (BoC) rate announcement on Wednesday. Money markets predict that the policy rate will remain unchanged.
The Bank of Canada has not changed its benchmark interest rate since July when it reached a 22-year high of 5%. The latest data shows economic growth faltering and inflation easing to 3.1%. In November, full-time work gains offset part-time declines, with the manufacturing and construction sectors adding jobs.
The service sector didn’t have a good month as they lost 13,400 jobs, predominantly in wholesale and retail trade and finance, insurance, real estate, rental and leasing. “If we dig a little deeper, we can see that the Canadian job creation machine is gradually losing steam,” stated Karl Schamotta, Cambridge Global Payments’ chief market strategist.
The latest development is likely to maintain the expectations of an early rate cut next year, which in turn indicates a slowdown in the Canadian economy as a whole. The report has been compiled by Ismail Shakil and Steve Scherer in Ottawa with additional contributions from Dale Smith in Ottawa, Divya Rajagopal and Fergal Smith in Toronto. The editing has been done by Denny Thomas and Chizu Nomiyama.
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