Canada's labour markets ended 2019 on a happier note - TD

Analysts at TD Bank Financial Group note that December saw Canada add a net 35.2k jobs, while the unemployment rate fell to 5.6% (from 5.9%), helped by a downtick in labour force participation.

• "The composition of the gains was favourable. Full-time work led the charge(+38.4k). The private sector broke its contractionary streak, adding 56.9k net positions while public sector employment fell 21.5k. Gains were entirely due to employees (+35.4k) as self-employment was effectively unchanged.
• December's gains can largely be put down to net additions in construction (+17k) and accommodation and food services (+24.9k).
• Gains were also concentrated by region. Ontario added a net 25.1k positions, while Quebec added 21.1k. In both cases, enough jobs were added to drop their unemployment rates from 5.6% to 5.3%.
• Wage growth cooled a touch, to 3.8% y/y for permanent employees (from 4.4%). Aggregate hours worked were flat on the month, leaving the year-on-year tally at a paltry 0.3%.
• The twelve-month trend in hiring was roughly unchanged at 26.7k in December, while the six-month trend was a modest 12.1k. Despite the decent increase in December, the six-month trend in private sector employment stood at just 1.3k per month.
• 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.
• The more concerning trend is in hours worked, which while noisy, have been decelerating over the last two years. Given weak Canadian productivity of late, the soft trend does not augur well for economic growth.
• Today's data is consistent with Governor Poloz's remarks yesterday, where he played it cool. Some aspects of the jobs data, such as wages, have been performing well, while others, such as hours, have not been. It seems we'll have to wait for this month's Monetary Policy Report (January 22nd) to see where the Governor and his team land in interpreting these and other recent trends."