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The unemployment rate fell to its lowest level in more than 40 years as Canada closed out a calendar year that saw it produce jobs at a pace not seen since 2002.

Statistics Canada reported Friday that the unemployment rate dropped to 5.7% in December, down from 5.9% the month before, to reach its lowest mark since comparable data became available in 1976.

“The books closed on a phenomenal year for Canadian employment with another spectacular result for December,” CIBC economist Nick Exarhos wrote in a brief report.

“In our judgement, that should be enough to see the Bank of Canada hike rates later this month, with the employment figures more than enough to offset recent disappointments on GDP.”

Read: Expect growth until late 2020: Desjardins

In a daily points report from before Friday’s jobs announcement, Scotiabank global economics expert Derek Holt forecasted today’s jobs numbers would be watched more closely than those released in the U.S., especially because Canada “posted a blockbuster employment gain of about 80,000 in November.”

Holt called for “a negative for December,” due to “a potential correction in youth employment” and “any hiring response to looming minimum wage hikes in Ontario and Alberta.”

But, in a follow-up research note, Holt said Scotiabank has also changed its Bank of Canada forecast for this month. On the back of today’s “ridiculously strong” employment data, he says, Scotiabank “now expect[s] the Bank of Canada to hike by 25bps on January 17th.” 

The StatsCan numbers show wages for permanent employees (the BoC’s preferred measure) were up by 2.9% y/y and are skyrocketing. Says Holt: “Millionaires are not being created overnight, but the pace of change is eye-catching. […] Wage growth is at its highest since April 2016, which further reinforces how various factors including a temporary commodity income shock have turned around.” 

In December 2016, the unemployment rate was 6.9%, the StatsCan report said. The last time the jobless rate was 5.8% was October 2007.

The unemployment reading fell last month as the economy generated 78,600 net new positions, including 23,700 full-time jobs.

By region, Quebec and Alberta saw the biggest increases last month with each province adding more than 26,000 new jobs. Quebec’s unemployment rate fell 0.5 percentage points to 4.9%, while Alberta’s dropped 0.4 percentage points to 6.9%.

The December reading marked the 13th-straight month of job gains. However, about half of those positive numbers were within the survey’s margin of error.

Read: 5 economic trends to watch in 2018

For 2017, the agency’s labour force survey said employment rose 2.3% for its fastest growth rate in 15 years. The economy added 422,500 jobs last year with the gains driven by 394,200 new full-time positions.

By industry, factories saw employment increase 3.5% in 2017, while the services sector experienced a boost of 2%.

The survey also found that over the last year the number of employed people aged 55 and over rose 5.3%. This exceeded the 2.9% rate of population growth for the age group.

Among core-aged workers, those between the ages of 25 and 54, employment increased 1.6% last year.

In a separate report Friday, Statistics Canada says the country’s merchandise trade deficit widened to $2.5 billion in November, compared to a $1.6-billion deficit the month before, as imports outgrew exports.

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