By Robb M. Stewart


OTTAWA--Another month of unexpectedly strong hiring in Canada saw the country's number of jobless tick lower at the end of last year, a possible sign some strength is creeping back into the labor market.

Employers in the country added 90,900 jobs in December, Statistics Canada said Friday. That outpaced continued growth in the labor market and left the unemployment rate at 6.7% against 6.8% the month before, which outside of the early days of the pandemic was the highest in almost eight years.

Economists expected hiring to slow to 25,000 for the month, after an unexpected 50,500 jump in employment in October, and for unemployment to edge up to 6.9%.

When calculated using U.S. Labor Department methodology, Canada's unemployment rate was 0.1 percentage point lower at 5.8%.

Employment has risen meaningfully in three of the past four months, though rapid immigration in recent years has swelled the labor pool and for much of the year has outpaced hiring.

The year ended with 413,400 more people working in December than a year earlier, though the labor force was up 661,700 in that time. The rise in employment represented a 2.0% increase in December on the previous year, which is comparable with the pace a year earlier, and the average growth rate for the month in the three years before the Covid-19 outbreak.

Most of the jobs filled last month were full-time positions, though hiring was led by the public sector for a second straight month and private-sector employment was little changed. Hours worked also firmed in December, rising 0.5% for the month and 2.1% on 12 months earlier.

The jobs survey is the first major economic indicator of the year and sets the tone for the central bank's policy meeting later this month, leaving open the possibility interest rates might remain steady after being cut at each Bank of Canada meeting since last June.

Still, with hiring intentions still soft and some companies expected to be cautious given the threat the incoming U.S. administration will impose stiff tariffs on imports from Canada, economists expect the jobless rate could creep higher, though federal government efforts to slow immigration are likely to mean labor-force expansion is limited.

Canada's unemployment rate has risen steadily from 5% at the start of 2023, even as immigration has swollen the population.

The participation rate--the proportion of the working-age population who were either employed or unemployed--was steady on the month before at 65.1% in December.

At the same time, the employment rate, the proportion of the population 15 and older that is employed, rose slightly to 60.8% from 60.6%, the first increase since January 2023. The rate on a year-over-basis was down 0.9 of a percentage point.

Statistics Canada's survey showed 57,500 of the jobs added in December were full-time, while part-time roles increased by 33,500.

Over the 12 months through December, the ranks of the public sector rose by 158,500, driven by education, health care and social-assistance jobs, while private-sector employment increased by 190,600. At the same time, those who were self-employed increased 64,300.

Wage growth continues to outpace inflation but has continued to cool. Average hourly wages for permanent employees were up 3.7% in December from a year earlier, slightly softer than the 3.8% advance economists anticipated, and a drop from a 3.9% annual advance in November. Overall average hourly wage growth eased to 3.8% for the month, the slowest pace since May 2022.


Write to Robb M. Stewart robb.stewart@wsj.com


(END) Dow Jones Newswires

01-10-25 0929ET