File photo by THE CANADIAN PRESS                                Fabricator Mike Caldarino uses a grinder on a steel stairs being manufactured for a high school in Redmond, Wash., at George Third & Son Steel Fabricators and Erectors, in Burnaby, B.C.

File photo by THE CANADIAN PRESS Fabricator Mike Caldarino uses a grinder on a steel stairs being manufactured for a high school in Redmond, Wash., at George Third & Son Steel Fabricators and Erectors, in Burnaby, B.C.

‘Gangbusters’ data bump jobless rate to 40-year low, but wage growth slows again

OTTAWA — A blast of new jobs last month knocked the country’s unemployment rate down to its lowest level since Statistics Canada started measuring comparable data more than 40 years ago —but despite eye-catching progress, Friday’s numbers also delivered disappointment.

Canada added 94,100 net jobs for its largest monthly increase since March 2012 when there was a gain of 94,000 jobs, Statistics Canada said in its the labour force survey. The November surge was fuelled by other positives: 89,900 new full-time positions and 78,600 employee jobs in the private sector.

The jobless rate fell to 5.6 per cent last month from October’s reading of 5.8 per cent, which had been the previous low mark since comparable data first became available in 1976. The old statistical approach — prior to 1976 — registered an unemployment rate reading of 5.4 per cent in 1974.

The improvements, however, obscured a key piece of data: weakening wage growth.

Year-over-year average hourly wage growth for permanent employees continued its decline in November to 1.46 per cent — its lowest reading since July 2017.

“There’s no question that the headline job growth is gangbusters strong,” said Frances Donald, head of macroeconomic strategy at Manulife Asset Management

“I would caution us against celebrating too quickly, however, because wage growth is decelerating sharply.”

Experts have been expecting wage growth to pick up its pace, thanks to the tightened labour market. But the opposite has been happening — wage growth has dropped every month since its May peak of 3.9 per cent and now sits well below inflation.

The Bank of Canada keeps a close watch on wages ahead of its interest-rate decisions.

The central bank has raised the rate five times since the summer of 2017 in response to Canada’s strong economic performance. Governor Stephen Poloz has signalled that more increases will be needed to keep inflation from rising too high.

On Wednesday, however, Poloz held the benchmark rate at 1.75 per cent. In explaining the decision, he highlighted other economic negatives such as weaker-than-expected business investment and the steep slide in oil prices.

The bank’s next rate announcement will be Jan. 9.

Donald expects the bank to remain focused on oil prices, the capacity of the energy sector to engage in business investment and the ability of Canadians — many of whom are carrying very high debt loads — to manage higher interest rates.

“Canadians need more wage growth to offset higher interest rates,” she said.

“If we’re seeing wage growth that can’t even keep up with the pace of inflation, it makes it much more difficult for households to absorb the Bank of Canada’s desire to lift rates higher from this point forward.”

Poloz, she added, will be more concerned about the further slowdown in wages in Friday’s report than optimistic about the overall job gain, particularly since it could affect the pace at which he will lift rates.

Royce Mendes of CIBC Economics said the Bank of Canada will take notice of the “massive reading” in the November jobs report as it mulls next month’s rate decision.

“The large gain in jobs will keep a January rate hike on the table for now, but we’ll need to see similarly positive evidence from other indicators and no major reversal in the next jobs report,” Mendes wrote Friday in a research note to clients under the headline: “Canadian Job Creation: Mind-Bogglingly Strong in November.”

Statistics Canada’s report Friday also said that, compared to 12 months earlier, employment was up 1.2 per cent following a net increase of 218,800 jobs. The addition of 227,400 full-time positions offset a small decrease in part-time work.

The November jobs report showed the goods-producing sector added 26,900 jobs following a notable gain of 14,800 construction positions. The services sector generated 67,200 jobs last month with help from the addition of 26,000 positions in professional, scientific and technical services.

By region, employment rose in six provinces and was led by gains in Quebec and Alberta.

Jobs

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

Alberta has 3,651 active cases of COVID-19.  (File photo)
Gov’t reports two more COVID-19 deaths in Red Deer on Sunday

Nineteen new deaths, including two in Red Deer, were reported by the… Continue reading

Andre Lemus, the owner of Las Palmeras in Red Deer, says he hopes in-person dining restrictions are lifted this upcoming Thursday. (Photo courtesy www.laspalmeras.ca)
Red Deer restaurant owner hopes in-person dining restrictions are lifted Thursday

The owner of a Red Deer restaurant says business has “dropped” since… Continue reading

The Town of Ponoka and the Alberta Union of Provincial Employees (AUPE) have ratified a new agreement, averting a strike. (File photo from Facebook)
Alberta gov’t ‘using pandemic as shield to lay off workers,’ says AUPE

The Government of Alberta’s “attacks on workers” is continuing with a new… Continue reading

Rocky Mountain House RCMP, EMS, Search and Rescue, STARS air ambulance and Alstrom Helicopters worked together to rescue a fallen ice climber Friday. (Photo contributed by Rocky Mountain House RCMP)
Rocky Mountain House RCMP help rescue fallen ice climber

Rocky Mountain RCMP helped assist a fallen ice climber Friday afternoon. At… Continue reading

Dwayne Buckle, 40 of Red Deer finished a 1,638-kilometre walk, in honour of his family. The 12-week, 82 day-journey wrapped up in Port Hardy, B.C. on Monday. Facebook photo
Red Deer man completes 1,638 km hike for cancer research

Dwayne Buckle, a Red Deer firefighter returned home Friday after his 12-week journey

A cat named Willow is shown in this recent handout photo. Victoria firefighter Capt. Tim Hanley says using a jackhammer and other home repair tools to save a cat stuck in a tiny basement drainpipe ranks as the strangest rescue call he's been on in his 20-year career. Hanley says he and three other firefighters spent more than two hours using sledgehammers and a jackhammer to break through Victoria homeowner Emma Hutchinson's concrete basement floor to free Willow, a nine-month-old kitten. THE CANADIAN PRESS/HO - Twitter, City of Victoria
Victoria firefighters use homeowners’ jackhammer to rescue cat trapped in tiny pipe

VICTORIA — A Victoria firefighter says using a jackhammer and other home… Continue reading

Conservative Leader Erin O'Toole holds a press conference on Parliament Hill, in Ottawa on December 10, 2020. THE CANADIAN PRESS/Sean Kilpatrick
No place for ‘far right’ in Conservative Party: O’Toole

OTTAWA — Federal Conservative Leader Erin O’Toole says there is “no place… Continue reading

Alberta Energy Minister Sonya Savage addresses the attendees while Tom Olsen, Managing Director of the Canadian Energy Centre, looks on at a press conference at SAIT in Calgary on Wednesday, Dec. 11, 2019. THE CANADIAN PRESS/Greg Fulmes
‘Morally and ethically wrong:’ Court to hear challenge to Alberta coal policy removal

First Nations, ranchers, municipal officials and environmentalists hope to persuade a judge… Continue reading

Sub-Lt. Jeffrey Delisle arrives at Nova Scotia provincial court for a sentencing hearing in Halifax on Friday, Feb. 1, 2013. THE CANADIAN PRESS/Andrew Vaughan
Canada’s spy-catching system caused delay, angst in Delisle case: former FBI official

OTTAWA — The U.S. Federal Bureau of Investigation’s former head of counter-intelligence… Continue reading

People wait to be screened before entering Little Mountain Place, a long-term care home that has had 41 residents die since a COVID-19 outbreak was declared at the facility in November in Vancouver on Sunday, January 3, 2021. Staff in long-term care homes across Canada are struggling to isolate elderly residents with dementia during COVID-19 outbreaks, accelerating the deadly spread of the virus, experts say. THE CANADIAN PRESS/Darryl Dyck
Care home staff struggle to isolate dementia patients during outbreaks: experts

VANCOUVER — Staff in long-term care homes across Canada are struggling to… Continue reading

A passer by walks in High Park, in Toronto, Thursday, Jan. 14, 2021. This workweek will kick off with what's fabled to be the most depressing day of the year, during one of the darkest eras in recent history. THE CANADIAN PRESS/Chris Young
‘Blue Monday’ getting you down? Exercise may be the cure, say experts

This workweek will kick off with what’s fabled to be the most… Continue reading

Winnipeg Jets' Blake Wheeler (26) just misses the net against goaltender Laurent Brossoit (30) during  scrimmage at their NHL training camp practice in Winnipeg, Wednesday, January 6, 2021. THE CANADIAN PRESS/John Woods
Jets return to practice a day after suspending workouts due to COVID concerns

WINNIPEG — The Winnipeg Jets have returned to practice a day after… Continue reading

Most Read