Canada job gains blow past expectations

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Canadians employers added more than 100,000 positions in December, a strong number that could prompt the Bank of Canada to raise interest rates again at the end of the month.

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The central bank spent almost all of 2022 trying to cool an economy that it said was in “excess demand,” stoking inflation to dangerous levels. The benchmark lending rate ended the year at 4.25 per cent, a four-percentage-point increase from March, representing the most aggressive series of interest rate increases in the Bank of Canada’s history.

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Yet employers continued to report that they were desperately short of workers. They hired 104,000 people last month, dropping the unemployment rate to five per cent, one of the lowest rates on record, Statistics Canada reported on Jan. 6.

Average hourly wages were 5.1 per cent higher than December 2021, the seventh consecutive month that wage gains exceeded five per cent, Statistics Canada said. That’s an unusually strong rate of wage growth that the Bank of Canada will see as evidence of continued inflationary pressure, as wage demands tend to influence prices for goods and services.