The Canadian economy just keeps playing into the hands of the Bank of Canada as the central bank continues to resist pressures to trim interest rates.
The latest jobs report has given the Bank yet more ammunition to defend its position. The December figures showed a nice recovery following the sharp drop in November. The economy netted 35,200 additional jobs last month and the unemployment rate dropped three basis points to 5.6%. Virtually all of the gains came in full-time employment in the private sector. The number of part-time positions fell by 3,200 and the public sector shed more than 21,000 jobs.
For all of 2019 Canada added more than 320,000 jobs: 283,000 full-time and 37,500 part-time. Most of that was in the first half of the year. Some market watchers see the slowdown through the second half of 2019 as an indicator that big, job growth numbers will likely diminish for 2020. This could be a sign that slack in the labour market is tightening-up.
None the less, on-going job growth and low unemployment support the Bank of Canada’s stance that the economy remains relatively resilient, despite globe headwinds, and rate cuts are unnecessary.
The next rate setting and Monetary Policy Report are due on January 22nd.