Canada’s unemployment rate hit an all time low of 5.6% in November with British Columbia leading the country at 4.4%. The country created 94,000 jobs far surpassing expectations of 10,000 new jobs based on the soft employment growth trend in recent months.
"Well First of all it's a shock," said Sean Coakley, market strategist at Cambridge Global Payments. "its very significant and it's a sharp contrast with the states for the same data released where U.S. employment figures came in far less than expected, about 75%."
Most of the gains in the country were full-time jobs. However, this was not the case for British Columbia. Bucking the trend in the rest of the country, full-time employment in November fell by 17,500 jobs. The decline was offset by a massive 33,400 gain in part time jobs.
While it lead the country in job gains, British Columbia’s unemployment rate ticked up 0.3 percentage points to 4.4% in November even with employment increasing by 0.6%.
The 15,900 job increase in B.C was not enough to overcome the 24,500 new people entering the workforce, which caused unemployment to grow by 8,500 and the unemployment rate to tick up.
While B.C. had relatively good job performance it trailed Ontario, Quebec and Alberta which each created more than 20,000 jobs in November. Coakley says that Quebec and Alberta leading the other provinces is a surprise and goes against recent headlines that say economic growth, particularly in Alberta, should be weaker.
B.C.’s employment growth was led by gains in the construction industry which grew by 5,000 jobs, administrative support services which grew by 7,200 jobs and healthcare growing by 3,400 jobs. Agriculture had the largest percentage growth increasing 14.2% to 26,500 in November from 23,200 in October.
Brian DePratto, Senior Economist for TD said that there was a decent mix of goods-producing and service sector job growth. Although the country experienced employment gains, wage growth slowed for the six straight month with the pace of growth being halved in just four months.
“This is certainly not the type of wage growth one would typically associate with unemployment at all-time lows, and this aspect of the report would generate further debate among economists and policy makers," said DePratto.
Coakley says that one factor that could keeping wage growth down is a distributional issue based on the fact that employers are still more powerful than employees when it comes to negotiating wages.Coakley says that in order to get a full picture of the labour market one needs to consider both employment and wage growth.