Jobless rate nudges up to 6.5% in December
Last Updated Fri, 06 Jan 2006 10:07:16 EST
CBC News
Canada's unemployment rate crept up by 0.1 percentage points to 6.5 per cent last month as more people entered the job market, Statistics Canada said Friday.
There was little change in employment in December as an increase of 36,000 full-time jobs was offset by part-time losses of 38,000.
The report was weaker than economists had been expecting. According to a survey by Bloomberg News, market watchers' expectations were for the economy to add 20,000 new jobs last month and for the unemployment rate to hold at 6.4 per cent.
Statistics Canada said employment grew during the month by 23,000 in the finance, insurance, real estate and leasing sector. Employment in the industry showed little growth over the course of the year despite the December increase.
In professional, scientific and technical services, roughly 21,000 jobs were added, while the public administration sector added 11,000 positions.
For all of 2005, the economy added roughly 233,000 jobs. Statistics Canada said full-time job growth finished the year up two per cent while part-time employment slipped one per cent.
B.C. leads in job creation
British Columbia led the country in job creation last month with growth of 2.5 per cent . A gain of 14 per cent in construction-sector employment, coupled with increases of more than 13 per cent increase in trades, and the information, culture and recreation sector were the driving factors in the province's rise to the top.
The B.C. unemployment rate edged up 0.2 percentage points in December to 5.1 per cent but still remained among the lowest in over three decades, Statistics Canada said.
Alberta finished 2005 with the country's lowest overall unemployment rate at 3.9 per cent, followed by Manitoba's 4.1 per cent.
From coast to coast, the provincial jobless rates for December were:
* N.L., 15.5 per cent
* P.E.I., 10.9 per cent
* N.S., 8.5 per cent
* N.B., 9.6 per cent
* Que., 8.2 per cent
* Ont., 6.2 per cent
* Man., 4.2 per cent
* Sask., 5.3 per cent
* Alta., 3.9 per cent
* B.C., 5.1 per cent
Interest rates seen continuing to rise
One economist said the latest unemployment report is unlikely to break the Bank of Canada out of its recent cycle of interest rate tightening.
"Wages are still running a bit hot for comfort, the jobless rate is still quite low and the underlying trend in employment (especially full-time) remains strong," said BMO Nesbitt Burns chief economist Sherry Cooper in a commentary.
The Bank of Canada has raised its key overnight rate by one-quarter of a percentage point at each of its last three interest rate announcements to its current position of 3.25 per cent. The next rate decision is due on January 24.
"We expect the combination of a U.S. growth moderation and the lagged impacts of a strong Canadian dollar on factory employment to do a lot of the work in engineering that cooling in Canadian hiring, leaving the Bank of Canada with only another 50 basis points in rate hikes," added CIBC World Markets economist Avery Shenfeld.
