November was a dynamite month for job creation, with a record 94,000 jobs created, pushing the unemployment rate lower to 5.6%.
This is the lowest level of unemployment since records began in the mid 70s. Just under 90 thousands of the jobs are full time, and more than 78 thousand were created in the private sector – both are positive elements of the job growth. The strongest job gains were in Quebec and Alberta, with 14,000 new construction jobs created, 27,000 in ‘goods production’, and the rest in services, especially in professional, scientific, and technical services.
While experts hailed the news as a big and very positive surprise, they also highlighted the fact that wage increases are beginning to lose momentum and to decline. The strength of the economy is boosting pressure on inflation, with the rate jumping to 2.4%. In its latest announcement, the Bank of Economy decided not to increase rates, but will likely adjust its approach in the new year if economic temperatures remain hot. While the economy is strong, rising interest rates and government intervention remain as anchors on the still generally healthy real estate market.
These two factors have resulted in real estate dynamism in Canada’s biggest city lessening to the extent that the City of Toronto is worried it will lose up to $100 million in revenue from the land transfer tax. In recent years, the city government has become extremely dependent on the transfer tax to finance spending. Tembo will keep a close eye on economic indicators in the new year to see if these record trends continue.