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Business, Financials
January 8, 2011

Canada adds 22,000 jobs in December

OTTAWA (AP) — Canada’s economy added a better than expected 22,000 jobs in December, but not enough to change the unemployment rate, a national reporting agency said Friday.

Statistics Canada said last month’s jobless rate stayed unchanged at 7.6 per cent. Full-time employment rose by 38,000 and manufacturing created 66,000 new jobs last month, the strongest month seen since 1976, with most of the jobs located in Ontario and Quebec.

Economists had expected an overall gain of less than 20,000 in December.

Canada’s job creation pace continued to stay well ahead of the US, which saw a disappointing 103,000 employees added in December.

The underlying strength of the Canadian numbers was noted by investors, who boosted the loonie 0.62 of a cent to 100.93 US cents in early morning trading.

“We’ll take 22,000 jobs gained in December after a year that had Canadian job markets on fire through the creation of 368,500 jobs. That would be equivalent to around four million jobs in the US,” said Scotiabank economist Derek Holt.

CIBC economist Emanuella Enenajor, along with others, reacted with skepticism over the eye-popping number, suggesting that next month’s report may show a revision. Still, she said the December data sets up Canada well for 2011.

“Going forward, we see strong private-sector hiring to offset weaker public sector job gains,” she said.

Meanwhile, analysts expect the US picture to also brighten. The US created a mere 1.1 million jobs last year, but the last three months have seen gains of 384,000. As well, several economic indicators have shown signs of recovery as 2010 drew to a close.

“We anticipate close to 2.7 million in job creation during 2011, which should bring the unemployment rate down to 9.1 per cent by year end — and that would reflect a sustainable decline,” said TD Bank’s Alistair Bentley.

Analysts view a rebound in US job creation and consumer spending as essential for Canada’s economic recovery since about three quarters of Canadian exports head south of the border.

Few analysts changed their minds about what the jobs report will mean for interest rates when the Bank of Canada’s governor is due to determine if rates will rise in a little over a week’s time.

While relatively strong, private sector economists said the gain was not sufficiently robust to alter the overall trend of moderate but steady employment growth going forward, which should keep the bank on the sidelines until midyear.

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