The Canadian economy added 37,000 jobs in January as unemployment fell slightly to 5.7 per cent, the first decline since December 2022, according to a Friday report from Statistics Canada.
After three consecutive months of little change in the jobs rate, the January figures were better than economists expected but were mostly driven by an increase in part-time work. Twelve thousand full-time jobs were lost.
Average hourly wages, which have been consistently growing at a four to five per cent annual pace as Canadians seek compensation to account for inflation, rose 5.3 per cent from a year ago.
“A decent job gain, a slide in the jobless rate and persistent five [per cent] wage growth are hardly the stuff of an urgent call for rate cuts,” BMO chief economist Douglas Porter wrote in a note.
CIBC senior economist Andrew Grantham concurred, writing, “Today’s data suggest that the Bank won’t be in a rush to cut interest rates, and we maintain our expectation for a first [interest rate cut] in June.”
Employment rose across several sectors in January, led by wholesale and retail trade, as well as finance, insurance, real estate, rental and leasing. Meanwhile, accommodation and food services saw the largest employment decline.
Canada’s labour market cooled significantly last year as high interest rates weighed on consumer spending and business investment, pushing up the unemployment rate from 5.1 per cent in April to 5.8 per cent in December.