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Economic News

Quebec's Unemployment Rate Fell to 4.7% in December

Florence Jean-Jacobs
Principal Economist
January 5, 2024

Highlights

  • Employment edged up in Quebec in December (+9,800), while the number of people looking for work fell, pushing the unemployment rate down 0.5 points to 4.7%. That was the second-lowest jobless rate recorded in any province, behind only Manitoba.
  • In the year to December 2023, Quebec created a net 65,200 jobs, mainly in the service sector. In Q4 2023, 13,800 jobs were lost overall, due to a substantial decline in October.
  • A widespread public sector strike meant that hours worked fell by 1.1% in December from year-earlier levels.
  • More than one-third of public sector employees working in educational services and 4% of all employees in Quebec lost work hours because they were on strike in December.
  • Job losses in the private sector (-16,100) were offset by public sector gains (+19,100), particularly in health care (see table). 

Comments

Wholesale and retail trade, which are sensitive to the lagged effects of interest rate hikes on consumer discretionary spending, shed 12,400 jobs, the sector's second consecutive monthly decline.

On an annual basis (December to December), finance (-14,000), agriculture (-12,500) and manufacturing (-12,000) saw the biggest losses, while health care (+24,400), accommodation and food services (+18,000) and education (+16,500) added jobs

Implications

Despite a slight rebound in December, Quebec's labour market slowed overall in the fourth quarter (see graph). Private sector job losses in two of the last three months combined with a decline in job vacancies throughout the year indicate that hiring is losing steam.

Quebec's real GDP fell for the second consecutive quarter in Q3 2023, and Q4's employment data suggests that this trend may have continued at the end of the year. The public sector strike, which reduced the hours worked by education and health care employees in December, is a key driver of the deterioration expected in Q4.

We remain of the view that Quebec's economy is in the process of rebalancing, and that this will continue in 2024. However, we think the province will avoid a severe recession (see our most recent forecast).