Canada's jobs are 'back in positive territory': RBC chief economist
It turns out that 2019 was a good year for the Canadian labour market, with the latest data from Statistics Canada bringing the total number of jobs added to 320,300 — the second-best year for jobs growth in this country since 2007. Hiring bounced back in December with 35,200 jobs created, on the heels of two consecutive monthly declines including a stunning loss of 71,200 jobs in November.
The numbers corroborate the latest comments made by Bank of Canada Governor Stephen Poloz, who during a fireside chat Thursday said the labour market has been on a healthy trend which, he said, should continue even in the face of global trade uncertainties.
Below is reaction from economists on the strong jobs growth both last month and during 2019 as a whole, and what the numbers signal for the economy and the Bank of Canada.
“I spent a month with a pit in my stomach, thinking: ‘What are we going to do if we get another massive downside shock to jobs?’ But, we can breathe a sigh of relief, and we know that last month’s 70k drop was more of a data blip and not a canary in the coal mine for some massive weakness in the Canadian economy… So, it’s not a catastrophe but we’ve also got to keep it in context that maybe things are not as bright as they were six months ago.”
Frances Donald, chief economist, Manulife Investment Management
“Yes, the jobs number came in better than expected to end the year and alleviated some fears following the large decline in November─ but it’s clear that the momentum peaked in Q2 and began to really slow in the fourth quarter meaning a weak ‘hand-off’ into 2019.”
David Rosenberg, chief economist and strategist, Rosenberg Research and Associates
“On an annual basis, 2019 was a good year for Canadian hiring … [but] productivity growth has been pretty dismal. For those who don’t know, the math really is that an economy grows either from more workers or more productive workers. So to the extent we’ve had good hiring for the year, but not particularly impressive economic growth, really what that means is we’ve had almost no productivity growth. So that’s very much a concern.”
Eric Lascelles, chief economist, RBC Global Asset Management
“There’s relief here that we sustained a little bit better momentum going into 2020 than the impression was in the prior two months. Although we had about 320,000 jobs for the year, a bit of a banner year for job growth, there is a clear distinction between the first half of the year and the second half of the year. The second half of the year accounted for less than one-quarter of those jobs. So there was a lot of hiring and activity occuring in the first half; we saw momentum really peter off in the second half the year. The private sector in particular, those jobs were actually showing a contraction up until this December report.”
Beata Caranci, chief economist, TD Bank
“The partial rebound in employment means that the Canadian economic alarm bells have quietened down. However, given the still-not-great-trend in jobs and GDP growth towards the end of the last year, it’s also too early to sound the all clear. Given that GDP growth is running below potential, we suspect that the underlying trend in job growth could remain fairly muted, which would see the unemployment rate creep higher towards six per cent, and the Bank of Canada responding with an interest rate cut in April."
Andrew Grantham, senior economist, CIBC Capital Markets
“Follow the bouncing ball. After November's across-the-board disappointment, one could be forgiven for a bit of nervousness ahead of today's report. By no means was the December report a barnburner, but neither is it too concerning. It was encouraging to see private sector hiring come back to life, even if the trend there is still weak. Indeed, the six month trend in hiring more generally has unquestionably normalized, and is pretty close to the 15k to 20k that we would consider 'normal' at this point in the cycle.”
Brian DePratto, senior economist, TD Bank