Canada’s labor market gaining strength

A five-year low? That’s not necessarily accurate, Statistics Canada says.

On Friday, the country’s Statistics Canada reported that the country gained 153,200 jobs in November. For the first 11 months of the year, the economy added 732,800 jobs.

But since 2011, Canada’s participation rate has increased to 65.7% from about 64.6%. The report compared current employment statistics to the participation rate in November of last year and showed a big drop in job creation by the disabled. This week, federal lawmakers voted to increase the minimum wage in the country to $15 an hour by 2021.

The government says it’s important to consider the increase in the participation rate when analyzing unemployment.

When the rate remains stable, that’s an indication that there aren’t many people looking for work, said Philip Cross, a former Statscan chief economic analyst. When the participation rate increases, more people are seeking a job.

“If you drop the participation rate to 60%, you’re guaranteeing that all of the gains that are going to be made are going to be made by those with little or no education,” Cross said.

December jobs in Canada are due to be released next week.

Still, Cross thinks many Canadians might be surprised that employment is outstripping population growth.

The unemployment rate, which is based on a survey of current residents, is a deeper picture into the labor market, as it only includes those who actively look for a job, Cross said.

But Friday’s report largely reinforced the economic optimism that the Canadian economy has been feeling all year. The economy expanded at a 3.9% annual rate in the third quarter of 2018, up from 3.4% in the previous quarter.

The latest report shows that more of those newly hired are holding on to their jobs for a longer period.

A national survey released earlier this month showed that the federal government’s decision to raise the minimum wage is having some positive effects on workers.

Results from the National Household Survey — collected every five years — showed that the proportion of people who were working full-time, full-year rose to 62.5% from 62.1% during the first quarter of 2018.

Andrew Nevin, an economist at Moody’s Analytics, said the government’s latest economic data shows that Canada’s economy remains robust despite the country’s relative weakness in energy prices.

“While that point has become a bit of a cliché in the U.S., Canada’s central bank should still continue to nudge its benchmark interest rate higher,” Nevin said.

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