Canada Unemployment rate eases to 7.4 per cent as job surge continues
OTTAWA - Canada's unemployment rate edged down by a tenth of a percentage point to 7.4 per cent in December as the economy churned out another 53,100 jobs – more than twice the number economists had been expecting.
The consensus of analysts had been for an increase of about 25,000 jobs and the expectation was for the jobless rate to remain unchanged from November..
Statistics Canada said most of December's new jobs were full-time and most were in the private sector – both considered healthy signs.
December's job gains brings total job creation in 2003 to 271,000. While, that's less than half the 560,000 jobs that were created in the boom times of 2002, Stats Can noted that most of 2003's job growth came in the last four months of the year, when 219,000 of the new jobs were added.
Stats Can said the slowdown in manufacturing was the reason that for the fall-off in job growth from 2002 to 2003. Since November of 2002, 82,000 factory jobs have disappeared in Canada – mostly in Ontario and Quebec. About 4,100 manufacturing jobs vanished in December.
Still, the underlying strength in the economy – especially late in the year – is drawing more Canadians into the labour force. Stats Can said the participation rate reached a record high of 67.7 per cent last month.
Statistics Canada's Labour Force Survey is based on a monthly survey of about 54,000 households from across the country. However, it excludes people in the Yukon, Northwest Terrorities, Nunavut, those living on Indian Reserves, full-time members of the Armed Forces and inmates in institutions. A few terms behind the numbers that are worth defining: Labour force: Civilian non-institutional population 15 years of age and over who were employed or unemployed when the survey was taken. Participation rate: Labour force expressed as a percentage of the population aged 15 years and over. Unemployment rate: Number of unemployed persons - people available for work and were either on temporary layoff, had looked for work in the past four weeks or had a job to start within the next month - expressed as a percentage of the labour force. Not in the labour force: People unwilling or unable to work under current labour market conditions. Sometimes, the unemployment rate goes up even though the economy adds more jobs. This can happen when good economic times attract more people back into the labour force faster than jobs can be created.
The question now is whether this jobs report will be enough to persuade the Bank of Canada to hold off on cutting interest rates at its next policy-setting meeting on Jan. 20.
The central bank had been widely expected to chop its key lending rate from the current 2.75 per cent to help Canada's export-reliant economy cope with the damage caused by a rapidly-rising dollar. But December's job creation numbers are making some wonder if that will happen.
"This is yet another very strong jobs report, and the persistent decline in the unemployment should not be overlooked," said BMO Nesbitt Burns economist Doug Porter in a morning commentary.
"This should quash overheated talk that the Bank needs to take aggressive action on the rate front, although it will also give another upward push to the loonie," he said.
And the Canadian dollar did continue its rise, closing at 78.67 cents US. That was up 0.58 cents from Thursday's close.
The dollar's boost was further strengthened when the U.S. government released weak U.S. job creation numbers that had some analysts predicting that the U.S. Federal Reserve would not raise interest rates any time soon.
Statistics Canada said this country's December job growth was concentrated in health care and social assistance, management and administration, transportation and agriculture.
Over the full year, job growth was highest in health care (up 77,000), in finance and insurance (up 53,000), in the public sector (up 47,000), and in construction (up by 45,000).
Ontario had the biggest job gains in December, pushing that province's jobless rate down a tenth of a percentage point to 6.7 per cent. British Columbia notched up another 24,000 jobs, enough to push the province's jobless rate down 0.8 of a percentage point to 6.8 per cent – its lowest level since May 2001.
Quebec lost 27,000 full-time jobs last month, pushing its jobless rate up to 9.4 per cent, up 0.3 percentage points from November. Stats Can blamed losses in manufacturing jobs.
Written by CBC News Online
cbc.ca
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