JOBS COME THROUGH

DECEMBER GROWTH SHATTERS EXPECTATIONS, BUT DON’T CALL IT A TREND JUST YET

The Canadian economy shattered expectations by adding 81,300 full-time jobs in December, reversing the 2016 trend that saw the majority of job growth come in the form of part-time positions.

The full-time jobs bonanza, the biggest of its kind since 2012, masked a decline in part-time work, for a total increase of 53,700 positions. Economists had been projecting the overall number of jobs to fall. “If previous months’ reports have been a mixed bag, December’s is best called a loot bag,” said Brian DePratto, Senior Economist at TD Economics. “Nearly all aspects of the report were positive: strong full-time job growth, healthy private sector hiring, and continued gains in employees (rather than self-employment),” he added in a note Friday morning.

“December’s jobs report was unambiguously strong,” added Sherry Cooper, chief economist at Dominion Lending Centres. “This is evidence that the economy may be absorbing the slack that’s kept interest-rate’s near record lows.”

Despite the good news, unemployment ticked up slightly to 6.9 per cent in December as more Canadians entered the labour force.

DON’T MISS SEEING THE FOREST BY FOCUSING ON A SINGLE TREE.

Some market watchers also cautioned against declaring December’s “loot bag” the start of a trend.

Avery Shenfeld, chief economist at CIBC Capital Markets, said the “fly in the ointment” of the largely positive December report is that total hours worked declined by 0.8 per cent from the previous month.

“So we had more people working in full time jobs, but the average employee reported a shorter work week in terms of their own hours — go figure,” he said.

What’s more, while the December job and trade data released Friday were encouraging, Shenfeld stressed the importance of looking at 2016 as a whole as a more reliable guide to the state of Canada’s economy.

“Don’t miss seeing the forest by focusing on a single tree. Looking back at the past 12 months… we’ve had only a 0.4 per cent rise in full time jobs, against a 4.5 per cent rise in part time work,” he said.

“The result is that total hours worked in December 2016 were essentially unchanged” from a year earlier.

Derek Burleton, deputy chief economist at TD, also noted that full-time employment remained “a weak spot” when the whole of 2016 was considered.

“The reversal we saw is welcome but still leaves part time as the major driver of job growth in 2016,” he told the Financial Post.

The December jobs report also reflected continued uneven hiring across industries and types of positions.

“Goods-producing industries, which include energy and manufacturing and make up a little more than a fifth of the Canadian workforce, have yet to fully recover the 300,000 jobs lost during the (last) recession,” Paul Matsiras, an economist at Moody’s Analytics, wrote in a report Friday.

“Construction, thanks in large part to the expansion in the housing market, has been the only real support to the goods-producing aggregate,” he said in the report, which noted that employment growth in Canada has lagged the United States and Mexico for the past two years.

Service-providing industries, meanwhile, haven’t posted year-over-year job losses since 2009, and continue to counter the job shedding in the energy sector, which was hit by collapsing oil prices, Matsiras said.

The December report showed that employment in service-providing industries rose by two per cent from to a year ago, while employment in goods-producing industries fell by 1.6 per cent during the same period.