After three months of Canada’s employment rate remaining stagnant, 37,000 new people were hired last month, driven primarily by an increase in part-time work, according to Statistics Canada.
The latest labour force survey found that employment went up in Ontario, Newfoundland and Labrador, Manitoba and Nova Scotia. It declined in Saskatchewan.
The national employment rate dropped by 0.1 percentage points to 61.6%, while population growth rose by 0.4, outpacing employment growth by 0.2%.
The labour force remained stable for Canadians aged 15 and older but the participation rate fell by 0.2%, bringing it to 65.3%.
The total hours worked last month increased by 1.1%, when compared to January 2023.
Hourly wages among employees also increased by 5.3% on a year-over-year basis.
Wage growth was seen highest among high-income earners, particularly with women.
The average wages for women increased by 6.2% whereas the average wages for men only increased 4.4%.
Those earning in the top 25% of the wage distribution saw an increase of 5.9%, compared to 4.6% for those earning in the bottom 25%.
The employment rates for men and women aged 25 to 54 both declined in January due the rate staying consistent, while Canada’s population grew.
Certain sectors of the economy performed better than others, including finance, insurance, real estate, rental, leasing wholesale and retail trade.
However, sectors like accommodation and food services were hit the hardest in lost employment.
Canada’s economy added 345,000 jobs compared to this time last year, the bulk of which was supported by temporary foreign workers and international students.
The Bank of Canada maintained its key interest rate at 5%, which some economists predict will lead to increased unemployment throughout 2024.
“I would classify the labour market as tighter-than-expected, but not necessarily stronger-than-expected,” Andrew Grantham, CIBC’s executive director of economics told Yahoo Finance.
“That’s because, yes, employment continued to rise a little bit faster than the consensus expected. But it really paled in comparison with the big increase in population.”
Grantham doubts that CIBC will be changing its forecast on the Bank of Canada’s timeline for the next rate cut, predicting that the central bank won’t be lowering it before June.
“Today’s data is certainly not going to speed up the timeline for the Bank of Canada,” said Grantham.
