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Jobless rate was 6.3 per cent in Nov., StatsCan reports

Greater Sudbury added jobs, but rate increased because more people were looking for work
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Greater Sudbury added jobs in November, but a surge in the size of the labour force – the number of people looking for work – pushed the city's jobless rate up (File).

Greater Sudbury added jobs in Nov., but a surge in the size of the labour force – the number of people looking for work – pushed the city's jobless rate up.

Statistics Canada's monthly labour force survey pegged the local unemployment rate at 6.3 per cent last month, up slightly from the six per cent rate in Oct.
Roughly 82,500 people had a job in Nov., compared to 81,700 a month earlier. But the number of people looking for work rose to 87,900 from 87,000 during the same time period. 

Factoring in the range of error, StatsCan says unemployment in Greater Sudbury could be as low as 5.5 per cent or as high as 7.1 per cent. Compared to the same time in 2017, city's unemployment stood at 6.4 per cent, with 81,800 people working out of a labour force of 87,300.

In Ontario, employment increased by 20,000, the result of gains in full-time work. The number of unemployed was little changed and the unemployment rate held steady at 5.6 per cent. Compared with 12 months earlier, employment in the province increased by 66,000 or 0.9 pr cent, also due to more full-time work. 

Nationally, Canada's unemployment rate last month was down to its lowest level since Statistics Canada started measuring comparable data more than 40 years ago. 
Canada added 94,100 net jobs for its largest monthly increase since Mar. 2012 when there was a gain of 94,000 jobs. 

The Nov. surge was fuelled by other positives: 89,900 new full-time positions and 78,600 employee jobs in the private sector. The jobless rate fell to 5.6 per cent last month from Oct.'s reading of 5.8 per cent, which had been the previous low mark since comparable data first became available in 1976. 

The old statistical approach — prior to 1976 — registered an unemployment rate reading of 5.4 per cent in 1974. The improvements, however, obscured a key piece of data: weakening wage growth.

Year-over-year average hourly wage growth for permanent employees continued its decline in Nov. to 1.46 per cent — its lowest reading since July 2017.

"There's no question that the headline job growth is gangbusters strong," said Frances Donald, head of macroeconomic strategy at Manulife Asset Management.

"I would caution us against celebrating too quickly, however, because wage growth is decelerating sharply."

Experts have been expecting wage growth to pick up its pace, thanks to the tightened labour market. But the opposite has been happening — wage growth has dropped every month since its May peak of 3.9 per cent and now sits well below inflation.

The Bank of Canada keeps a close watch on wages ahead of its interest-rate decisions. The central bank has raised the rate five times since the summer of 2017 in response to Canada's strong economic performance. Governor Stephen Poloz has signalled that more increases will be needed to keep inflation from rising too high.

On Wednesday, however, Poloz held the benchmark rate at 1.75 per cent. In explaining the decision, he highlighted other economic negatives such as weaker-than-expected business investment and the steep slide in oil prices. The bank's next rate announcement will be Jan. 9.

Donald expects the bank to remain focused on oil prices, the capacity of the energy sector to engage in business investment and the ability of Canadians — many of whom are carrying high debt loads — to manage higher interest rates.

"Canadians need more wage growth to offset higher interest rates," Donald said.

"If we're seeing wage growth that can't even keep up with the pace of inflation, it makes it much more difficult for households to absorb the Bank of Canada's desire to lift rates higher from this point forward."

Statistics Canada's report Friday also said that, compared to 12 months earlier, employment was up 1.2 per cent following a net increase of 218,800 jobs. The addition of 227,400 full-time positions offset a small decrease in part-time work.

The Nov. jobs report showed the goods-producing sector added 26,900 jobs following a notable gain of 14,800 construction positions. The services sector generated 67,200 jobs last month with help from the addition of 26,000 positions in professional, scientific and technical services. 

By region, employment rose in six provinces and was led by gains in Quebec and Alberta.

– Files from Canadian Press


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Darren MacDonald

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