Not even another rate hike from the Bank of Canada could quell B.C.’s ultra-tight labour market in December as the province added 16,600 jobs during the holiday season.
Last month’s hiring surge pushed the West Coast unemployment rate down 0.2 percentage points (4.2 per cent) compared with a month prior when the province shed 13,300 jobs.
Canada added 104,000 jobs last month as the national unemployment rate declined 0.1 percentage point to 5 per cent, according to Statistics Canada data released on Friday.
The most notable gains in B.C.’s job market came in transportation and warehousing (+8,300 jobs); other services (+7,500 jobs); and finance, insurance, real estate, rental and leasing (+4,400 jobs).
Losses were felt most acutely in wholesale and retail trade (-3,000 jobs); business, building and other support services (-3,800 jobs); and health care and social assistance (-2,100 jobs).
The Bank of Canada hiked its key rate seven consecutive times in 2022 in a bid to cool the economy and tamp down on inflation.
B.C. answered the central bank’s late October rate hike by quickly shedding more than 13,000 jobs in November. But the Bank of Canada’s early December rate hike did not seem to cloud the job market in the same way as the province recouped those losses that same month.
Despite last month’s headline gains, data shows the province lost 7,900 full-time jobs. The surge in hiring instead came via part-time positions (+24,500 jobs).
This stands in stark contrast to gains on the national level, which saw 85,000 full-time jobs added to the economy last month.
“While it's always dangerous to read too much into a single Canadian jobs report, it's safe to conclude that the economy still had some serious zip at the end of last year," BMO chief economist Douglas Porter said in a note.
“At the very least, today's robust results support the view that the BoC will hike rates again later this month.”
He’s predicting the central bank will hike its key rate by 25 basis points, which would bring the key rate to 4.5 per cent.
“The Canadian labour market remains much stronger than expected and (so far) apparently resilient to rapidly rising interest rates," CIBC senior economist Andrew Grantham said in a note, adding he also expects a rate hike of 25 basis points at month’s end.
“I know that we’ve got economic headwinds coming and I do understand we need to keep our eye on that, but 2022 was a good year for British Columbia [jobs],” said Jobs Minister Brenda Bailey, adding the province saw 63,000 jobs added to the economy in 2022 despite challenges like the war in Ukraine, rising interest rates and inflation.
Her job outlook was cautiously optimistic for the coming year despite news Thursday that Amazon would be nearly doubling their global layoffs to 18,000 from a previously planned 10,000.
Bailey said this seems to be affecting Silicon Valley more than Vancouver with deeper layoffs happening stateside. But the jobs minister said she believes in the province’s robust tech sector, which recently ranked as North America’s fastest-growing tech sector, according to CBRE Group Inc.
“So far, I am hearing that people who are experiencing layoffs are, in fact, finding work and there are still many, many jobs open in the tech sector right now,” said Bailey. “Not to say that can’t change, but as it is right now we’re continuing to see growth in our tech sector.”
—With a file from Albert Van Santvoort