Unemployment down to 6.1 in December

(CBC) - The Canadian economy added more jobs than expected in December, helping push the national unemployment rate back down to a 30-year low of 6.1 per cent.

November's jobless rate was 6.3 per cent.

Economists had been looking for job creation last month of between 10,000 and 15,000 positions. However, Statistics Canada said 62,000 jobs were created.

December's employment increase included 37,000 full-time jobs and 25,000 part-time jobs.

Overall for 2006, employment grew by 345,000 jobs, or just over two per cent, in 2006, the highest growth rate since 2002. This was the 14th consecutive year of employment increases in Canada.

In Ontario, employment increased by an estimated 42,000 in December, with part-time jobs making up almost two-thirds of the increase.

In Alberta, employment growth paused in December after months of red-hot expansion, but the province still led the country with the lowest provincial jobless rate of 3.4 per cent.

For all of 2006, Alberta's employment rose by six per cent, or roughly 109,000 jobs, the largest rate of growth for the province since 1980.

"Although Alberta represents only 10 per cent of working-age Canadians, it accounted for almost one-third of all employment growth in 2006," Statistics Canada said.

The job growth helped give a boost to workers' earnings. Statistics Canada said average hourly wages stood at an estimated $20 in December, an increase of 2.6 per cent from 12 months ago.

Alberta's tight labour market continued to put pressure on wages, which rose 5.9 per cent from a year ago to $21.60, the highest growth rate in the country. Alberta surpassed Ontario throughout 2006 for the highest hourly wages.

Rate cut on hold?

The better-than-expected December job figures prompted some economists to speculate that the Bank of Canada will hold off on any potential early interest rate cuts meant to stimulate the economy.

"This strong job performance will help backstop confidence and spending," said BMO Nesbitt Burns deputy chief economist Douglass Porter.

"It’s also just the tonic the ailing loonie was looking for, and also should dampen talk of an early move by the Bank of Canada to trim rates," he said.

One economist suggested that the Canadian economy will be hard pressed this year to live up to 2006's stellar job creation.

"Looking out over 2007, with economic growth decelerating over the first half of the year, it is unlikely that the labour market will be able to match 2006," said TD Bank economist David Tulk.

"However, the combination of a pick-up in economic activity over the second half of 2007 and the continuation of high commodity prices will deliver a respectable 190,000 new jobs this year," he said.

© the CBC, 2006