Canada's employment growth continued to rebound in December, rising by 91,000 or an encouraging 0.4 percent from November, above expectations for a 20,000 gain in Econoday's survey of forecasters. The unemployment rate dipped to 6.7 percent in December from 6.8 percent in November. Forecasters looked for unemployment to rise to 6.9 percent in December.

The slight fall in the unemployment rate comes after it hit its highest level in November since January 2017 (not counting the COVID-impacted impacted 2020-2021 period), and interrupting its upward trend since April 2023. The unemployment rate is still up 0.9 percentage points compared to December 2023.

The participation rate was 65.1 percent in December, the same as in November and versus 64.8 percent in October.

Total hours worked rose 0.5 percent in December but are up 2.1 percent from a year ago. Average hourly wages increased at their slowest pace since May 2022, rising by 3.8 percent year-over-year after the annual growth rate was 4.1 percent in November, and up 4.9 percent in October.

For December, employment gains were mainly in full-time work, up 56,000 or 0.3 percent. This follows an increase of 51,000 in November, the third employment gain in the past four months.

Private sector jobs rose by 26,700 in December after a mere 6,300 rise in November and a 20,500 increase in October. Public sector employment rose by 40,400 following November's increase of 45,000, and after falling by 17,200 in October. Self-employment rebounded by 23,700, after a 700 downtick in November.

Another modest 20,000 rise in employment is the call but it's not enough to prevent the jobless rate from ticking up to 6.9 percent from 6.8 percent in November.

The Labour Force Survey is a key economic indicator giving an overall picture of employment and unemployment. Employment counts the number of paid employees working part-time or full-time in the nation's business and government establishments. The unemployment rate measures the number of unemployed as a percentage of the labor force.

As in the U.S., this report is used as an indicator of the health of the domestic economy. Employment trends and break-downs by industry groups highlight the strength in job creation and the implications for future sectoral activity. The unemployment rate is used as an indicator of tightness in labor markets and can foreshadow a future increase in wages. Labor force data provide investors with the earliest signs of industry performance. While other data are produced with a month or two delay, these data are available only a week to 10 days after the end of the latest month. Reactions can be dramatic - especially when the result is unanticipated.

The information in the report is invaluable for investors. By looking at employment trends in the various sectors, investors can take more strategic control of their portfolio. If employment in certain industries is growing, there could be investment opportunities in the firms within that industry.

The bond market will rally (fall) when the employment situation shows weakness (strength). The equity market often rallies with the bond market on weak data because low interest rates are good for stocks. But sometimes the two markets move in opposite directions. After all, a healthy labor market should be favorable for the stock market because it supports economic growth and corporate profits. At the same time, bond traders are more concerned about the potential for inflationary pressures.

The unemployment rate rises during cyclical downturns and falls during periods of rapid economic growth. A rising unemployment rate is associated with a weak or contracting economy and declining interest rates. Conversely, a decreasing unemployment rate is associated with an expanding economy and potentially rising interest rates. The fear is that wages will accelerate if the unemployment rate becomes too low and workers are hard to find.