Canadian employment rises in January, jobless rate falls to 5.5 pct

Canada’s employment rose by around 34.5k in January. The jobless rate dropped again in the month, to 5.5 percent, aided by a second consecutive monthly fall in labour force participation. The gains were entirely in full-time work, rising 35.7k as part-time employment came in at -1.2k. The net new jobs were greatly for employees, rising 26.3k. Of that rise, mostly of it was seen in the public sector.

The industry mix is challenging to align with the public/private split. All of the January rise came on the goods-producing side, including marked rises in manufacturing, construction and agriculture. On the contrary, the service producing industries came in usually subdued, with a marked fall in health care employment.

Region wise, net job gains rose in Quebec and Ontario, rising 19.1k and 15.9k respectively. The Quebec jobless rate dropped again to 5.1 percent, still below the all-time low seen last summer. Hourly wages for permanent employees came in at a sound pace of 4.4 percent year-on-year, although this figure is still flattered by weakness this time last year. Aggregate hours worked dropped slightly on a month-on-month basis, leaving year-on-year growth at 0.5 percent.

“Looking ahead, we expect some near-term challenges – the novel Coronavirus is likely to continue to hit activity in the travel/accommodation sectors for instance. But, absent a deeper or more lasting shock, we see few catalysts to break the recent trend-like performance of labour markets. The bigger question from a GDP perspective is whether/when all these new workers will start pushing hours worked higher”, said TD Economics in a research report.