In January 2023, the Canadian economy had created 150,000 more jobs than the previous month. In December, there were only 100 more jobs than in November, a number too small to be included in the statistics.
Quebec also had a surprising start to the year on the job market, with 47,400 more jobs in January 2023 and an unemployment rate below the 4% threshold. In December, the Quebec economy added 9,800 jobs and the unemployment rate stood at 4.7%.
The job market slowed down in the middle of the year. “Started like a lion, the year ends like a fishtail,” commented Desjardins senior economist Marc Desormeaux.
This slowdown was long expected by economists, given the weak economy struggling with inflation and high interest rates.
But if the job market slows down, wages continue to increase at an astonishing pace, note National Bank economists Matthieu Arseneau and Alexandra Ducharme.
Despite clear signs of easing in the labor market, wage pressures remain significant. After an increase of 4.8% in November, the average hourly wage increased by 5.4% in December, a level that the Bank of Canada considers incompatible with a return of inflation to the 2% target.
“This undoubtedly complicates the task of the central bank, which could be reluctant to give oxygen to an economy which nevertheless shows signs of significant weakening,” commented the economists of the National Bank.
222,600 unemployed in Quebec
The unemployment rate remained unchanged at 5.8% in Canada in December, after increasing in five of the previous seven months, Statistics Canada reported. There were 1.2 million unemployed people in Canada in December, 202,000 more than at the start of the year.
In December, there were 222,600 unemployed people in Quebec, 12,600 more than a year earlier. The unemployment rate fell from 5.2% in November to 4.7%, due to the net creation of 9,800 jobs and a reduction in the number of people looking for work.
There were 65,200 more jobs in Quebec in December than a year ago. During the same period, the unemployment rate rose from 3.9% to 4.7%, a sign that job creation is not keeping pace with the faster rate of population growth.
At 4.7%, Quebec’s unemployment rate is the second lowest among Canadian provinces, after Manitoba.
Hiring is running out of steam
The number of vacant positions continues to decline in Quebec, which indicates that hiring is running out of steam, commented Florence Jean-Jacobs, economist at Desjardins.
At the end of 2023, there were 175,600 vacant positions in Quebec. This is 70,600 or almost 30% less than a year earlier, according to the Institute of Statistics of Quebec.
The vacancy rate, or the number of vacant positions in relation to labor demand, decreased from 6.1% to 4.3% in one year, a situation comparable to the Canadian average.
The number of layoffs is increasing
Closures have been announced one after another and layoffs have been piling up in Quebec since the start of the year. The number of layoffs has almost doubled this year compared to 2022, according to notices sent by companies to the Labor Ministry.
Their number of layoff notices increased from 7,621 in 2022 to 13,572, an increase of 78%.
Quebec’s economy continues to weaken and its domestic product declined in the second and third quarters of 2023, signaling a technical recession.
With the collaboration of Julien Arsenault, The Press