Canada’s labor market delivered a modest upside surprise in December, with employment rising 8.2k, defying expectations for -5k decline. The gain, however, marked a sharp slowdown after three strong months that added a combined 181k jobs through November, signaling that momentum is cooling into year-end.
Beneath the headline, job composition was mixed. Full-time employment surged by 50k, while part-time jobs fell by -42k, pointing to improving job quality even as overall growth slowed.
At the same time, the unemployment rate jumped to 6.8% from 6.5%, above forecasts, reflecting a notable increase in labor supply. Indeed, the participation rate rose 0.3ppt to 65.4%, while the employment rate held steady at 60.9%, suggesting new entrants are outpacing hiring.
Wage growth eased slightly to 3.4% yoy, down from 3.6% in November.
