Canada's unemployment rate ticks down

Evidence suggests couples benefit from fully merged finances, but younger people are increasingly moving away from the practice, and many financial experts recommend against it. Money is removed from an ATM in Montreal, Monday, May 30, 2016. (Ryan Remiorz / The Canadian Press)

OTTAWA — Canada’s labour market capped the year with some “good news,” adding 91,000 jobs in December, shattering economist expectations, though there are still calls for further interest rate cuts amid the threat of U.S. tariffs.

Statistics Canada’s labour force survey on Friday said the unemployment rate dipped 0.1 percentage points to 6.7 per cent, also beating expectations.

“Even though today’s data overall was much better than expected, we still have an unemployment rate of 6.7 per cent. That’s one per cent higher than we started 2024 at, and that increased slack within the economy is clearly leading into some disinflationary pressures,” said CIBC senior economist Andrew Grantham.

“I think the best news is that the employment-to-population ratio has gone up, even if we don’t believe that employment growth was as strong as the headline suggests.”

The report said the country’s employment rate rose for the first time since January of 2023, though it contextualized it against slowing population growth.

Grantham is maintaining his call for a quarter-point cut when the Bank of Canada issues its next policy decision on Jan. 29.

Analysts had projected the job growth to be between 10,000 to 25,000 new jobs in December.

The education, transportation and finance sectors saw the largest gains in employment in December, while the public sector added 40,000 jobs.

Full-time employment rose by 56,000.

While private sector employment was little changed in December -- up 27,000 jobs -- self-employment rose for the first time since February, up by 24,000.

Still, while private and public sector jobs have bounced back and grown since the pandemic, self-employment continues to lag. While self-employment rose by 64,000 jobs in 2024, it’s still down about 100,000 jobs since February 2020.

The report also highlighted decelerating wage growth, with average hourly wages rising 3.8 per cent year-over-year in December -- the slowest growth since May 2022. November’s growth was 4.1 per cent, and 4.9 per cent in October.

This report by The Canadian Press was first published Jan. 10, 2025.