Canada’s Labor Market Picks Up Steam for Second Month

Bookmark

(Bloomberg) -- Canadian employment strengthened for a second-straight month, helping quell concerns that a weak labor market might force the Bank of Canada to promptly lower interest rates.

Canada’s economy added 34,500 positions in January, all in full-time work, Statistics Canada said Friday in Ottawa. That beat economist expectations for 17,500 new jobs. The unemployment rate dropped slightly to 5.5% in the month, from 5.6% in December. Wage gains accelerated 4.4% and hours worked rose 0.5%.

Today’s positive reading coupled with December’s print of a similar employment gain has more than offset the weakness in November, when the country shed 54,400 jobs. The three-month moving trend turned positive for the first time since October, another reassuring sign for the economy.

Canada’s Labor Market Picks Up Steam for Second Month

Canada’s currency appreciated on the report and was trading up 0.2% to C$1.3308 against its U.S. counterpart at 8:48 a.m. Toronto time. Two-year government bond yields were little changed at 1.48%.

Key Insights

  • A second strong reading will help support the view by the Bank of Canada that the labor market remains healthy and that weakness in the overall economy is coming from one-off events and geopolitical tensions
  • The report was largely in line with forecasts for a modest gain; most economists expect job growth to continue in 2020 albeit at a slower pace than the robust growth seen in the first half of 2019
  • Most of the gains in January were concentrated in the public sector, expanding by 21,300; private sector employment was up 5,000 and self-employment rose by 8,300

Get More

  • Provincially, Ontario and Quebec led employment gains up 15,900 and 19,100, respectively; Alberta employment fell by 18,900
  • Manufacturing jobs increased by 20,500 nationwide, the most since November 2017. Manufacturing and construction were the biggest gainers
  • Jobs in the services-producing sector dropped 14,500

©2020 Bloomberg L.P.

BQ Install

Bloomberg Quint

Add BloombergQuint App to Home screen.