Labour Market Update

Canada’s job market likely continued to underperform at the end of 2024. The December unemployment rate is expected to rise to 6.9%, up from 6.8% in November. Over the past year, unemployment has climbed by 1 percentage point—and by 2 percentage points from the cycle's lowest level.


Despite the rising jobless rate, Canada likely added around 10,000 jobs in December. The issue? Job creation (329,000 jobs in 2024) hasn’t kept pace with labour force growth (605,000 new participants).

Impact of Rate Cut

The Bank of Canada’s aggressive 2024 rate cuts are expected to help stabilize the job market in early 2025. Slower population growth should also ease labour force pressure. However, lower hiring demand means unemployment may not have peaked yet. Wage growth remains steady but could slow as job openings decline.

🇺🇸 The U.S. Labour Market
The U.S. job market is showing more resilience. The unemployment rate rose by just 0.5 percentage points over the past year and remains low by historical standards at 4.2%. December is expected to show 195,000 new jobs, above the three-month average of 173,000.

Unlike Canada, the U.S. labour market is normalizing, not faltering, thanks in part to large government spending that’s supporting the economy.

 What’s Next for Interest Rates?

Both the Bank of Canada and the U.S. Federal Reserve are expected to cut rates by 25 bps later this month.

• The Fed will likely pause rate cuts after January.
• The BoC is expected to continue cutting rates through mid-2025 to stimulate Canada’s weaker economy.