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Canada's Job Market and Economic Overview

Dec 10, 2024

Canadian Economic and Job Market Overview

Key Highlights

  • Job Growth: Canada added 51,000 jobs in November, a 0.2% increase.
    • Full-time jobs increased by 54,000.
    • Part-time jobs saw a slight decline.
  • Unemployment Increase: Unemployment rate rose by 0.3% to 6.8%, the highest since January 2017 (excluding pandemic years).

Labor Market Dynamics

  • Labor Force Participation: Increased to 65.1%, contributing to the rise in unemployment.
    • More Canadians entering the job market.
  • Demographic Insights:
    • Men aged 25-54 gained 45,000 new jobs, pushing their employment rate to 86.5%.
    • Women aged 55-64 lost 20,000 jobs, reducing their employment rate to 58.6%.

Industry Trends

  • Job Gains:
    • Wholesale and Retail Trade: +39,000 jobs.
    • Construction: +18,000 jobs.
    • Professional, Scientific, and Technical Services: +17,000 jobs.
  • Job Losses:
    • Manufacturing: -29,000 jobs, notably in Ontario.
    • Transportation and Warehousing: -19,000 jobs due to labor disputes.

Regional Employment Changes

  • Alberta: +24,000 jobs.
  • Quebec: +22,000 jobs.
  • Ontario: Stagnated, unemployment rate up to 7.6%, highest since 2014.

Economic Policy Implications

  • Bank of Canada: Upcoming decision on interest rate cuts.
    • Rising job numbers suggest economic strength.
    • Higher unemployment suggests potential economic softening.
  • Wage Growth: Average hourly pay rose 4.1% year-over-year.
  • Youth Unemployment: Jumped to 13.9%, up over two percentage points from last year.

Interest Rate Speculations

  • Expected rate cut by 50 basis points, lowering from 3.75% to 3.25%.
  • Inflation is within target, but concerns over weak GDP growth and rising unemployment.

Expert Opinions

  • Nathan Johnson (RBC): Economy softening despite controlled inflation.
  • Benjamin RIT (Bank of Montreal): Concerns over weakening Canadian dollar and potential faster decline.
  • Royce Mendes (Desjardins): Suggests a 25 basis point cut due to increased labor force participation rather than layoffs.

Banking Sector Updates

  • Performance-Based Bonuses: Increased by 12% across banks, totaling $23.75 billion.
    • CIBC: 19% increase.
    • Scotia Bank: 4% increase.
    • Royal Bank & National Bank: 16% and 14% increases, respectively.
    • TD: 10% increase despite challenges.
  • Canadian Western Bank: Earnings report delay due to legal claim related to their Maximum Financial division.
    • Involves $18 million in damages; market response saw a 5% drop but recovery observed.

This overview provides insights into the current state of Canada's job market, economic conditions, and the potential policy decisions by the Bank of Canada. The diverse expert opinions reflect the complexity of the economic landscape, balancing growth with cautious optimism.

Full transcript