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Canada's jobs market ekes out another gain in November as wages rise

Workers inspect lumber at West Fraser Pacific Inland Resources sawmill in Smithers, British Columbia, Canada February 4, 2020. REUTERS/Jesse Winter
Statistics Canada reported the latest jobs report for November on Friday. REUTERS/Jesse Winter

Canada’s labour market added 10,000 jobs in November, building slightly on its massive 108,000 gain from the month prior, Statistics Canada reported on Friday.

The gain was driven by an increase in full-time positions. Employment rose in sectors such as finance, real estate and manufacturing but fell in construction and wholesale trade.

The unemployment rate ticked lower to 5.1 per cent as labour force participation edged down.

Average hourly wage growth across all industries remained unchanged in November at 5.6 per cent, while wages for permanent employees tapered gains to 5.4 per cent on an annualized basis.

It’s the sixth month in a row that wages have risen by more than five per cent and a key measure the Bank of Canada is watching as it tries to head off a wage-price spiral.

“A host of wage metrics suggest that Canadian wage growth is either stabilizing or decelerating,” Royce Mendes, managing director at head of macro strategy at Desjardins, said in a note.

“As a result of the only modest gain in headline employment and the absence of any signs of accelerating wage growth, we continue to expect the Bank of Canada to hike rates just 25bps next week.”

However, other economists are still betting on a half-point hike from the central bank.

“Over the past 6 months, the Canadian labour market has largely stood still, with average gains of just over 4K a month. However, given still strong wage growth, the composition of job gains in November (mainly private sector and full-time), and the low unemployment rate, this report supports our view that the Bank of Canada will increase rates by 50 bps next week, before pausing in 2023,” Karyne Charbonneau, the executive director of economics at CIBC Capital Markets, said in a note.

The small gain in employment comes as economic growth in the third quarter was stronger than expected.

GDP grew 2.9 per cent on an annualized basis in the three-month period. While it marked a slowdown compared to the previous quarter, the headline number was significantly stronger than the Bank of Canada’s forecast in its latest Monetary Policy Report, where it predicted growth to stall through the end of this year and into 2023.

Michelle Zadikian is a senior reporter at Yahoo Finance Canada. Follow her on Twitter @m_zadikian.

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