Massive Canadian job gains make rate hike likely

The Canadian labour market added 104,000 jobs in December. Meanwhile, Canada’s unemployment rate dropped below 5.0 percent, nearing the record low of 4.9 percent seen this past summer. That trend raises the likelihood of the Bank of Canada raising interest rates again this month. The central bank hiked its benchmark rate by a cumulative 400 basis points to 4.25 per cent over the course of 2022.

That employment gain was largely driven by full-time work, particularly among youth aged 15 to 24, and was spread across industries. Construction, transportation and warehousing, information, culture, and recreation industries saw the biggest gains. Healthcare and social assistance sectors, where the labor shortage has recently been acute, saw a decrease in jobs.