For this relief, much thanks*

Weak Canadian employment data for October and especially November led to fears that the economy had stalled, potentially forcing the Bank of Canada into a rate cut early in 2020.  Jobs data for December, released by Statistics Canada this morning, tell a much more positive story: for the first time in many months, the Canadian report is actually stronger than the US non-farm payrolls data. 

The economy added 35,000 jobs in the final month of last year, lowering the unemployment rate by 0.3 percentage points to 5.6 percent.  The private sector added 57,000 jobs in the month, fully recouping a similar decline recorded in November.  This was offset by a fall in public sector employment.  Moreover, the new jobs created in the month were largely full-time in nature.  The only conspicuous weakness in the report was the geographic imbalance in job creation: Ontario and Quebec both posted strong gains, while more resource-oriented Provinces -- Alberta, Saskatchewan, Nova Scotia and Newfoundland/Labrador -- all lost jobs.

For 2019 as a whole, the economy added 320,000 jobs, or 1.7 percent.  This is actually a larger gain than was recorded in 2018, a year which saw much less angst about the possibility of an imminent recession. Most of the year's new jobs -- 283,000 of them -- were full-time in nature.  The services sector more than fully accounted for the annual increase, adding 367,000 jobs even as the goods-producing sector shed 47,000 positions.

The seeming recovery in the jobs market in December will give the Bank of Canada some additional breathing room.  Based on recent comments from Bank Governor Stephen Poloz, that will be a welcome development. Speaking in Vancouver this week, Gov. Poloz expressed concern that the housing market in certain cities (Vancouver and Toronto being the most notable) might once again be turning "frothy".  If weak employment data had forced the Bank into a rate cut, that frothiness would only have worsened.  Today's data, taken in conjunction with Poloz's comments, make a rate cut at the Governing Council meeting on January 22 very unlikely.

*Hamlet, Act I Scene 1. Just showing off.