Wow!

The headline numbers for Canada's employment report for November, released today by Statistics Canada, are simply extraordinary.  The economy added 154,000 jobs in the month, against a market expectation of about 35,000. This means that employment is now 185,000 higher than its pre-COVID peak. The unemployment rate plunged 0.7 percentage points to 6.0 percent, with the continuing growth in the labour force keeping it just above its pre-pandemic level of 5.7 percent. 

Details of the report are generally positive. Full-time work accounted for just over half of the gains, or 80,000 jobs; this helped to increase total hours worked by 0.7 percent in the month, bringing this measure back to its pre-pandemic level. The bulk of the gains in employment came in the private sector, which added 107,000 new positions in the month.  The services sector accounted for 127,000 jobs, while the goods-producing sector, which has been losing jobs in recent months, added 26,000 positions. Lastly, the gains were well distributed across the country, with six of the ten Provinces reporting higher employment. 

StatsCan's commentary on its labour market data has become increasingly lengthy in recent times, and  this month's report provides some important insights into the changing nature of the employment market. Once again the agency points out that while the number of jobs requiring post-secondary education has risen by 490,000 (or 12 percent) over the past two years, jobs requiring a high school diploma or less have fallen by 150,000. A high reported level of job vacancies and a falling unemployment rate among the latter group suggests that employers are finding it difficult to find workers to fill such positions, an impression that certainly matches anecdotal evidence in most parts of the country. 

StatsCan's characterization of the overall state of the labour market is worth quoting at length:

....labour markets increasingly resemble those observed since the summer of 2019, when Canada's unemployment rate fell to a record low, average wages increased after a prolonged period of little growth, and job vacancies ticked upwards. These conditions are likely to contribute to new or worsening imbalances in provincial, regional and local labour markets, including shortages of specific skills, or geographic mismatches between vacant positions and available workers with the skills to fill them.

This all sounds very positive, but there is now a potentially very dark cloud on the horizon, in the shape of the new omicron COVID variant.  The November survey data, on which today's report is based, were collected before omicron began to dominate the news feeds. It is still too soon to draw any conclusions about the severity of the new variant or its likely impact, although that doesn't seem to be inhibiting the media from attempting to stir up panic. With or without omicron, however, the perennial volatility of Canada's employment data makes it a safe bet that the numbers for the next month or two will fall well short of the remarkable numbers released today.