Key Takeaways
- Canada is expected to have lost 5,000 jobs in December, according to a Reuters survey of economists
- The unemployment rate is expected to rise to 6.6% from 6.5% in November
- Economists at RBC are predicting a steeper drop of 35,000 positions in December
- The labour market has shown a strong performance in recent months, with 181,000 jobs added from September to November
- The Bank of Canada will use the December jobs report to inform its first interest rate decision of the year at the end of January
Introduction to the Labour Market Report
The labour force figures for December are set to be released by Statistics Canada, and economists are eagerly awaiting the results. A Reuters survey of economists has predicted that Canada will have lost 5,000 jobs in December, which would drive the unemployment rate up to 6.6% from 6.5% in November. This prediction comes after a strong run in the labour market, which saw employers add 181,000 jobs from September to November. The labour market has been a key indicator of the overall health of the economy, and the December figures will be closely watched by policymakers and economists alike.
Economists’ Predictions
Economists at RBC are expecting a steeper drop in jobs than the Reuters survey, predicting a loss of 35,000 positions in December. This would offset the unexpected gains in November and bring the unemployment rate up to 6.8%. RBC’s prediction is based on the idea that the labour market has been running hot in recent months, and a correction is due. However, RBC also notes that the weakness in the labour market is still largely contained to trade-exposed sectors of the economy, suggesting that the overall economy is still performing relatively well.
The Labour Market’s Recent Performance
The labour market has been a bright spot in the Canadian economy in recent months, with 181,000 jobs added from September to November. This strong performance has surprised many economists, who had expected the labour market to slow down due to global economic uncertainty. The labour market’s resilience has been driven by a number of factors, including a strong services sector and a rebound in the energy sector. However, the December figures will provide a crucial test of the labour market’s strength, and will help to determine whether the recent gains can be sustained.
Implications for the Bank of Canada
The December jobs report will be the Bank of Canada’s last look at the state of the labour market before its first interest rate decision of the year at the end of January. The Bank of Canada has been watching the labour market closely, as it tries to balance the need to control inflation with the need to support economic growth. If the labour market is shown to be weakening, the Bank of Canada may be less likely to raise interest rates, which could help to support the economy. On the other hand, if the labour market is shown to be strong, the Bank of Canada may be more likely to raise interest rates, which could help to control inflation.
Conclusion and Future Outlook
In conclusion, the December labour force figures will provide a crucial snapshot of the state of the labour market in Canada. While economists are predicting a loss of jobs and a rise in the unemployment rate, the labour market has shown a strong performance in recent months. The Bank of Canada will be watching the figures closely, as it tries to determine the best course of action for monetary policy. As the economy continues to evolve, it will be important to keep a close eye on the labour market, as it remains a key indicator of the overall health of the economy. The January interest rate decision will be closely watched, and the December jobs report will play a crucial role in informing that decision.