'Slower population growth will limit labour force increases'
Canada’s labour market likely continued to underperform compared to a “resilient” US market in the last month of 2024, according to experts from Royal Bank of Canada (RBC) Economics.
Canada likely added 10,000 jobs last month. That pales in comparison to the projected 195,000 jobs that the US labour market added in the same month, say RBC Economics’ assistant chief economist Nathan Janzen and economist Carrie Freestone.
“We expect Canada added 10,000 jobs in December despite a rising unemployment rate. This has broadly been a story of the pace of job creation (329,000 over the last year) not keeping up with labour market growth (605,000 participants).”
Meanwhile, the US has seen “a more muted deterioration in the jobs market,” they say.
The unemployment rate has risen by 0.5 percentage points over the past year, and by 0.8 percentage points from its lowest point in the cycle.
“But, it is still low by historical standards, and consistent with a labour market normalizing rather than faltering,” say Janzen and Freestone.
Source: RBC
Stabilization in sight for Canadian labour market
Despite the struggles, stabilization is in sight for the Canadian labour market, say the RBC experts.
“The lagged impact of earlier and more aggressive interest rate cuts from the BoC in 2024 compared to other parts of the world is expected to help stabilize the labour market early in 2025, and slower population growth will limit labour force increases,” they say.
Still, there will be challenges.
“But for now, lower hiring demand means the unemployment rate is not likely at its peak yet. Wage growth has been resilient, but is expected to slow as job openings fall amid higher unemployment.”
Canadian companies are entering 2025 with a positive hiring outlook, according to a recent report from Express Employment Professionals.
Also, almost half (46 per cent) of companies in Canada plan to add new permanent roles in the first half of 2025 – a modest dip from 52% in the second half of 2024, finds the Robert Half survey.
